Man GLG's Henry Dixon reacts to the UK General Election result…
It’s been an extraordinary election, and clearly the result is pro-growth. While utilities are rising today in reaction, I actually don’t think they will benefit much further. The real winners are the banks, which we as investors can now look at in a much more favourable light.
You can’t underestimate the confidence banks will be feeling now in terms of their futures, and this could be an inflexion point for them, potentially drawing a line under PPI claims, bringing an end to the fine culture, and creating a more constructive outlook generally.
It is also now abundantly clear interest rates will rise for the right reason – namely because the recovery is continuing to gain strength. There had been a real concern that international investors would have been spooked by a left of centre government, causing sterling to fall and therefore forcing the Monetary Policy Committee into action with a series of ‘bad’ rate rises needed to stave off inflation.
