We find that there has been significant interest recently in UK politics, Brexit, sterling and UK equities.
We conclude:
1) GDP growth at 1.6% in 2018 will be modestly stronger than consensus at 1.3%, but is still likely to disappoint relative to the euro area or the US.
2) On Brexit, our view is that there will be a transitional arrangement (95% probability), and most likely such an arrangement will last longer than two years.
3) Changes: We take UK domestic banks to overweight from a small underweight. We finance this by taking UK life insurance to benchmark from overweight.