Fri, 14th Dec 2018
A poll published by Reuters is predicting that the FTSE 100 will see muted gains next year, thanks I part to uncertainty surrounding Brexit. The fund managers, analysts and brokers that participated in the poll collectively predicted that while the FTSE 100 will regain some of its losses over the next year, gains will be muted compared to previous expectations.
Some key results from the poll included:
- Prediction that the FTSE 100 will reach 7,357 by mid next year, and 7,500 by the end of the year.
- The FTSE 100 is predicted to end 2018 at 7,185.
These results are a stark contrast to the August poll which saw analysts predict that that the FTSE 100 would end 2019 at 7,900.
The expectation is that investors will be lured back to the UK’s leading index by the current breadth of availability of cheap stocks and the potential for high dividend yields.
Uncertainty over the outcome of Brexit negotiations is the main source of concern for investors. Theresa May is currently struggling to get MPs to agree to her proposals, and Trump’s words on the deal have proven to be yet another blow to the negotiations. Analysts predict that a no-deal Brexit could be costly not just for the UK and the Sterling, but also for the Euro.
To date, Sterling Devaluation against the dollar since the referendum has been around 14.2 percent, while against the Euro it has lost 15.8%. A no-deal Brexit would impact both sides as the UK sends exports to the bloc that work out to 8% of the bloc’s total.