UK fund managers are positioning their portfolios for a rally in financials later this year amid predictions a Brexit deal will finally be agreed between the UK and the EU, paving the way for higher interest rates.
Although it was expected the Bank of England (BoE) would follow the Federal Reserve's path in hiking rates this year, growing concerns around the Brexit negotiations prompted analysts to rein in rate rise expectations causing a "knock-out" blow to the UK financial services sector in 2018. Last year, the FTSE All-Share Financial index plummeted 13.6%, underperforming both the FTSE All-Share and MSCI World, which lost 9.5% and 3% respectively. Higher interest rates, an environment typically supportive of banks, have been put on hold by the BoE, having only been raised twice since the cu...
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