Franklin FTSE United Price, Forecast, Insider, Ratings, Fundamentals & Signals

After entering a technical recession in the latter part of 2023, Britain???s economy rebounded in January.

In a move aimed at offering voters a pre-election giveaway, UK Chancellor Jeremy Hunt cut national insurance contributions by 2 percentage points in his spring budget. He had previously cut national insurance contributions by 2 percentage points in the autumn budget less than four months ago.

The Monetary Policy Committee (MPC) vote in favor of keeping the Bank of England (BoE) policy rate at 5.25%.

As European inflation rates converge with targets, markets expect rate cuts. But central banks are set on a decisive victory over inflation. As expected, the Bank of England left the bank rate unchanged at 5.25% at its December meeting.

With one month left in the year, it's time for investors to consider buying stocks from the United Kingdom (U.K.). Recently, Vanguard highlighted that it expects U.S. stocks to generate annualized returns of 5.2% over the next decade, 280 basis points less than non-U.S. developed markets.

Higher savings rates have so far helped offset only modest increases in average mortgage rates. That's set to change through 2024, and this means higher interest rates will act as a growing drag on UK activity.

BoE shocks markets by holding off on a rate increase. We believe it is likely we have seen the last rate hike of the cycle.

A surprise fall in the UK inflation levels raised the probability that the BOE may pause interest rates. Despite the falling inflation levels, the U.K.?

Faced with a poor domestic economic outlook and a perceived valuation discount to US equities, the picture for British stocks doesn't look so rosy. Despite holding UK-listed stocks, the Franklin FTSE United Kingdom ETF actually has fairly limited exposure to the UK. Most of its holdings by weight are international blue chips. UK-listed stocks do indeed look quite cheap. Current P/E ratios appear modest, while averaging things across the business cycle still leaves the valuation at a discount to the historical average.

We're expecting one final rate hike from the Bank of England this week with wage growth and inflation both proving stubborn. Recent comments show the Bank is laying the ground for a pause, and we aren't ruling that out on Thursday.