Investors take positions in the United Kingdom a few days after Brexit

There are only five days left until, on January 31, the United Kingdom ceases to be part of the European Union, and market sentiment improves expectations. Investors are showing faith in the country’s assets. And since Boris Jonhson’s victory in the December elections, 1.9 billion dollars have been invested in mutual funds of equities, according to EPFR Global, while the Executive bonds have the best results in the region.

After the elections, the conservative government announced a wave of public and private spending to revive growth. This helped to alleviate the political paralysis of the United Kingdom and, above all, the fears of an abrupt divorce of the community bloc.

“Business confidence has improved dramatically since the elections and has increased to a maximum of several years,” said Lee Hardman , currency strategist at MUFG Bank Ltd, in statements to Bloomberg. “It should reinforce optimism about a cyclical uptick for the economy that should be positive for UK assets and the pound,” he added. The indexes of purchases of manufacturing and British services pointed this Friday to an initial recovery, with figures superior to those of the estimates of the economists, said the mentioned average.

The week of December 12, in which the general elections were held, more than 1,000 million dollars (997 million euros) were invested in mutual funds in the United Kingdom . In this way, the net flow increased by approximately 1.9 billion until the week of January 15. In addition, the issuance of pounds sterling in the debt market has achieved its record in January, with 24.4 billion pounds (29.024 million euros), according to data collected by Bloomberg.

The pound cuts profits

However, the British currency cut profits on Friday after the last indicator of British economic production was not as strong as expected to eliminate the idea of ​​a reduction in the Bank of England reference rate for this week. Thus, yields have reached the lowest level since October.

The last days of the pound with the United Kingdom in the European Union range between renewed economic optimism and the disadvantage of possible interest rate cuts. Even so, the currency has remained above the psychological mark of 1.30 dollars (1.18 euros) and various levels of technical support.

“There is a clear tone of supply for the pound,” said Jane Foley, director of exchange strategy based in London at Rabobank, in statements collected by Bloomberg. “This may be related to the anticipation that more stable political conditions after the elections should release the demand for accumulated investment. A rate cut may not be able to eliminate this perception for a long time,” he concluded.