Get Ready for the Great British Fire Sale
The fallout from the government’s mini-budget is UK assets looking more attractive to would-be acquirers.
However cheap stock markets get, the UK somehow manages to stay one step ahead. After a weak market open in Europe on Friday, an unexpectedly lavish stimulus package pummeled sterling, British government bonds and UK-focused stocks. Amid the wreckage, there will be opportunities for strategic buyers. Thanks to Prime Minister Liz Truss and her Chancellor of the Exchequer Kwasi Kwarteng, the “UK is cheap” narrative has gotten another leg.
The currency and bond markets were gripped by fear that policies designed to alleviate the cost-of-living crisis will just stoke inflation and push up rates while saddling the UK with an overwhelming debt burden. In an environment of sharply higher borrowing costs, debt-laden UK stocks suffered especially badly – the likes of commercial real-estate firms and sportscar manufacturer Aston Martin Lagonda Global Holdings Plc.