Boris Johnson's Britain: The Outlook For UK Assets

Johnson has built a reputation for being somewhat vague on potential policies, while it is also unclear what new Chancellor Sajid Javid will focus on, although being a former banker and City Minister he has experience of financial services.

Brexit Blog: FCA extends temporary powers

However, Johnson has given some clues as to his approach to Brexit, tax and spending.

Here, Investment Week looks at some commentary highlights from investment professionals on the outlook for UK assets.

Sterling

Colin Dryburgh, co-manager of the Kames Diversified Growth fund

"Given certain strong similarities between Donald Trump and Boris Johnson, it has been suggested the latter could be as good for sterling as President Trump has been for the US dollar; you could certainly be forgiven for believing the dollar has been strong, given Trump's recent calls for intervention. 

"The truth is, however, the dollar is today only around 1% higher, on a trade-weighted basis, than when Trump was elected. The inference that Boris will boost the pound might be similarly incorrect.

"Whatever your view of it, the US government is stable and delivering coherent economic policies; a far cry from the mess in the UK, which sees Boris as a manifestation rather than a cure."

Government bonds

Tristan Hanson, multi-asset fund manager at M&G Investments

"Based on the limited information provided during his campaign, there is a probability that Johnson will look to engineer an economic stimulus funded by higher government borrowing and lower taxes.

"So Brexit, or no Brexit, the multi-year outlook for gilts is dangerous at today's extremely low level of yields, even if the Bank of England cuts interest rates and resumes quantitative easing (QE)."

Brexit clarity will release pent-up demand for UK assets

UK equities

Jason Borbora-Sheen, co-portfolio manager of the Investec Diversified Income fund

"His appointment arguably increases the odds of a hard or no-deal Brexit, which will likely cause sterling to weaken and would hurt the UK's near-term growth opportunities, favouring the UK-listed multi-nationals over domestic plays.

"After a short while, however, we would expect investors to take advantage of the situation and look for oversold opportunities in the UK and add exposure."