Roth International Holding Fire on UK Investments

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Roth International says that despite the apparent uptick in the UK’s economic recovery, investors should remain wary.

Osaka, Japan., February 27, 2014 - (PressReleasePoint) - A recent investment report from Roth International to clients warns that they should remain cautious over investing in UK assets including equities and real estate.

The Asia-based boutique investment house suggests that doubts remain over the Bank of England’s ability to keep a lid on interest rates as unemployment draws closer to the 7% mark at which the central bank has mooted will prompt it to look more closely at raising them.

While the economic data has definitely improved, the British economy is ill-prepared to deal with the effects of higher interest rates at this time. Both the government and the population are still highly indebted and even a handful of basis points on interest rates would cause extreme discomfort,” said a Roth International researcher.

The UK’s real estate market has resumed its upward trend following concerted efforts by the government to boost lending including the “Help to Buy” scheme which provides taxpayer funds to would-be homebuyers unable to afford a large enough down payment on a property.

“Like US bonds, the yield on UK bonds – also called gilts or gilt-edged securities – have risen making it more expensive for the government to borrow money but, unlike US bonds, gilts aren’t denominated in the world’s reserve currency. This leaves the UK vulnerable to spikes in interest rates regardless of what the Bank of England does,” concluded the Roth International researcher.

The firm said, however, that it will be looking closely at resource stocks on the country’s FTSE 100 index citing the potential for a rebound after the sharp falls in mining stocks throughout 2013.        

Investment, Japan

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