UK equities to perform well in a slowing global economy

In 2007, the UK equity market presents an attractive investment opportunity. It is cheaper than global peers on both an earnings and dividend yield basis and, despite strong returns from the FTSE All-Share index for each of the past four years, the UK market has not become more expensive on an earnings basis, because the gains have been led by earnings growth rather than by multiple expansion. With margin expansion and the strength of the global economic backdrop likely to fade next year, it may be difficult to achieve another double-digit return. However, with the forecast dividend yield...