UK INCOME: UK stock market encouraged by overseas earnings

The global recovery is well in line with forecasts for 2010, 2011 and 2012 looking for growth of around 4% in each year.

This is a positive backdrop for the UK stock market where overseas earnings are the dominant part of companies’ activities. In the FTSE 100 around 80% of turnover comes from overseas. Some sectors such as oil or mining with companies like BP and BHP Billiton are almost 100% overseas. It is important to remember the UK stock market is not the same as the UK economy. In contrast to the global picture the UK economy looks rather different, dominated by the need to deal with an unsustainable government deficit as well as an indebted consumer - both providing a brake on growth. Forecasts a...