Great Britain under special observation

"There we go! Germany is overcoming its inertia. In the previous Capital Markets Compasses we briefly discussed the reforms that have been implemented. Meanwhile, the latest economic data has been encouraging. Manufacturing orders show an upward trend; production will follow suit. Despite all the doom and gloom (and the drums of war), the first half of the year brought two positive quarters. Naturally, a disclaimer regarding upcoming tasks and risks must be included here. Still, who would have thought Germany could surprise us positively? Even soccer fans are finding new hope following the coaching change at the DFB. Downing Street saw a change as well. Therefore, we take a closer look at the United Kingdom in this issue."

Special Topic: The United Kingdom - Conclusion

Despite low productivity, high public debt, and a chronic current account deficit, the United Kingdom has exceptionally strong institutions, a world-leading financial center, excellent universities, and considerable influence in foreign and security policy. In our view, the structural advantages of the UK as an investment location argue against a sustained increase in the risk premium or term premium on British government bonds.