John Redwood, a Conservative member of parliament and prominent advocate of the UK leaving the European Union, has urged investors to reduce their exposure to UK assets in his role as strategist for an investment firm.
In addition to his role as MP for Wokingham, Mr Redwood is employed as chief strategist for Charles Stanley.
In this role he attends a six-weekly investment strategy meeting at the firm attended by investment managers who directly manage the portfolios of private individuals.
The individual investment managers have autonomy over whether they follow the “guidance” of Mr Redwood, and the firm’s chief investment officer, John Cunliffe.
Mr Redwood contributed an article to FTAdviser's sister paper the Financial Times, in which he said investors who can take a global view should reduce their UK investments.
Mr Cunliffe said this reflects the current investment view of Charles Stanley.
He said that while he and Mr Redwood have different opinions on many issues, “there is a large degree of agreement” between them on the state of the current market and UK economy.
Mr Cunliffe said he doesn't think the UK market is going to crash, but that UK economic growth is slowing, and will continue to slow, at a time when global economies are displaying rising growth, and with that in mind, investors should look to opportunities abroad.
This is a direct reversal of the views previously held by Mr Cunliffe and Mr Redwood, who last year were “very bullish” on the UK.
Mr Cunliffe said the interest rate cut, easing of bank lending constraints and policy of quantitative easing introduced by the Bank of England in the immediate aftermath of the EU referendum result, boosted the economy and stock market last year, allowing investors with a domestic focus to profit.
But he said those policies have the effect of merely “bringing growth forward” and so do not boost the economy this year.
He added that the Bank of England have reversed those measures this year, including putting interest rates up to 0.5 per cent at the start of November.
The changed outlook for monetary policy has prompted Charles Stanley to change its view on the UK market, and urge investors to look internationally.
Mr Redwood has been an MP since 1987 and for much of that time has been a vocal advocate of benefits of the the UK leaving the European Union. He twice stood for the leadership of the Conservative Party, once losing to John Major and once to William Hague.
Charles Stanley are keen on emerging market equities and negative on government bonds.