U.K. Desperately Needs Wage Growth: Brough

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July 10 (Bloomberg) -- Schroder Investment Management Executive Director Andy Brough discusses the outlook for the U.K. economy, impact of monetary policy, and his subsequent investing strategy. He speaks with Guy Johnson on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

Schroeder.

Thank you.

Let's talk about central banks and the u.k.. -- the u.k. you do not think the bank of england is in a rush.

I do not.

Prices since i was a kid have been a subject and people say that we need to cool the housing market.

They have intelligent comments when they say that the bank of england cannot build houses.

At the end of the day, it is a factor.

Sure.

Like any market, profits get high and they come to bear.

We are seeing that now.

I expect to see that cool off.

Building as many houses as they can.

There is a shortage of labor.

All the results are coming out and they are good.

If i am mark carney, i look at factors.

Sure, on employment is coming down.

Wages are not going up.

At the end of the day, you put interest rates up and is this too much money in the economy?

You are seeing the money supply.

You bring up wages and you are starting to see them go up in the housing sector.

There is a bit of a survey.

You see wages going up across the board.

A lagging indicator.

You get more of that.

Can they change the game?

The government desperately needs higher wages.

If you are looking, the only way they can increase income is to take more and they take more and say that you had a 10% or 5% wage increase and we will have that.

The only way out of this fiscal mess that the country is in is to get higher wages and more tax revenue to keep costs flat.

That has been missing from the economic recovery.

Trading 121. how big of a break could this be?

Well, fortunately, successive governments have destroyed the manufacturing sector of this country and is only 10 percent of gdp.

There is a silver lining.

There is a silver lining.

There is a silver lining.

This could be the germans.

The good news is, there is suppressing inflation.

We are keeping the eye out of the -- it has barely moved.

Despite the price going up.

The sterling, if you like, has taken the strain and is not so strong that the dollar.

We're seeing a lot of companies export or have overseas operations and continue to downgrade earnings because of the foreign exchange.

-- born exchange impact.

Was talk about the other way.

It is a steep hill.

The markets climb a pretty steep hill.

The markets, that is.

The central banks are not going to tighten and you can keep the equity market.

I think so.

It is hard to believe.

We are on the bloomberg screen this morning.

[applause] it is virtually flat for the year.

There are people all over the place.

Yeah.

Like the results is -- results are that it can only go up.

They are reporting earnings and increases.

Virtually every day, the reporting of the results are good and in line with expectations.

Dividend increases and a double-digit against a backdrop of low saving rates and inflation.

I think it is right.

I am not saying it is going to shoot up.

The indicator for me is saying i have to invest in the equity market.

Has that happened yet question mark that happened in february.

It is quiet now.

Relative to other assets, equities look ok.

Yeah.

Yes.

I went contract what i was holding -- i went to track what i was holding in my funds.

I was tracking what was happening to prices and i was in an auction.

There are people there who are willing to invest in these assets should -- it needs acid.

-- in these assets.

We are seeing companies last

This text has been automatically generated. It may not be 100% accurate.

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