UK 14:38 Thursday, 8 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
Our expectation is that Labour will accelerate the decline in the UK’s finances and also make the UK a less attractive place to do business. And so far our expectations have been met and there are certain sectors you’d not touch with a bargepole. But, overall, the threat of what Rachel Reeves might do seems more than discounted in UK equity valuations. Looking at forecast earnings growth for the FTSE 350 and then valuing that basket ex-banks and oil stocks, and comparing it to other international markets on a similar basis, then a simple PEG analysis suggests that UK equities are c40% too cheap. Now we accept that matters can change, but there is a margin of error which suggests buying a basket of value FTSE 350 investments is going to serve you well on the medium-term. And there are some stocks where the political zeitgeist is actually in their favour!
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