Global plays are vital as indebtedness hits UK-focused consumer

ON UK INCOME

Insight's Tim Rees says until consumer and banking leverage falls to more rational levels in the UK, he will continue to focus on global plays.

Many UK equity income funds currently have their exposure concentrated in internationally-orientated companies, rightly citing the indebtedness of the domestic consumer as their rationale. In recent years, certain domestic groups have actually benefited, with low rates putting money in the pocket of variable rate mortgage-holders at the expense of savers. Countering this is the fact a near-zero interest policy is likely to be unsustainable given inflation has been above target for some time. In earlier periods when deflation was being imported, UK policymakers allowed domestic infl...