 while the real returns from cash are being hammered by inflation. Listed shares are a lower percentage of total household assets in the UK than in most other developed countries, according to a new report from the Centre for Policy Studies (CPS). The same report found that there is around £2 trillion of cash in various savings accounts – roughly equivalent to the entire market capitalisation of the FTSE 100. 'Yet at the moment, buying shares is treated by the regulators as a more dangerous pursuit than gambling – and high street banks are discouraged even from suggesting that their customers might benefit from moving their savings into shares, or offering easy ways to do this,' says Nick King, a CPS research fellow and former government adviser. This must change. A reassessment of stamp duty, which makes trading equities more expensive in the UK than elsewhere in Europe, is also long overdue. Another idea doing the rounds in the City is for the Government to offer tax relief to those investors who invest above a certain threshold of their portfolios in British assets. It's certainly worth considering. Unlocking this capital and encouraging Brits to achieve higher returns by not being overly cautious are important outcomes in their own right. But there's potentially an even bigger prize on offer: it would mean that more people have a stake in the economy and share in the upside of capitalism. Might this ensure that the general mood music in the UK is slightly less hostile towards business? Could that make politicians slightly less capricious in their attitudes towards wealth creators and more consistent with their policies? And would that result in more companies reassess){kind=link}
Chancellor’s incremental approach to reforms may not be enough to reverse course
The well-known fund manager Nick Train labelled the UK market a “back water” earlier this year, and the evidence he might have a point is mounting by the day.
Morgan Stanley has just produced some research showing that UK equities and corporate debt are among the “cheapest” (which is another way of saying: “least loved”) asset classes in the world.
Mining giant WE Soda criticised “extreme investor caution in London” when it scrapped plans to list in the UK last month.
A US investment bank is currently doing the rounds of City boardrooms telling executives they can increase the valuations of their companies by around a third if they relocate to the United States.