Profits expected to continue growing at a healthy rate

ON UK INCOME

Although we believe GDP forecasts are still too high, the global growth picture for 2011 should be healthy.

While we expect continued volatility, 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 Shell 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 - bo...