Newcastle, 11th

December 2015

Ben Gutteridge, CFA: Head of Fund Research

Brewin Dolphin

UK Economic Perspective:

UK Consumer – Reasons for Optimism

Source: Bloomberg/BoE

20.020.521.021.522.022.523.023.524.024.525.0

27.027.528.028.529.029.530.030.531.031.5

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Total Employment (millions)

Total employment (LHS) Full time employment (RHS)-8-6-4-202468

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

% Yo

Y

UK Average Earnings

Average Earnings YoY Average Earnings less CPI

-1

0

1

2

3

4

5

6

'05 '07 '09 '11 '13

UK CPI YoY (%)

-50

-40

-30

-20

-10

0

10

20

-6%-4%-2%0%2%4%6%8%

10%

'99 '00 '01 '02 '03 '04 '05 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

Consumer confidence

Retai

l sale

s YoY

, ex F

uel

UK retail sales and headline consumer confidence

Retail Sales, ex Fuel YoY Consumer Confidence

Source: Bloomberg/Datstream

012345678

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15

UK mortgage rates

75% LTV 2 year FixedMortgage Rate90% LTV 2 year FixedMortgage Rate2 Year Swap rate

80

85

90

95

100

105

110

'07 '08 '09 '10 '11 '12 '13 '14 '15

UK House Price Index, rebased to 2007

UK Housing

UK Consumer – Reasons for Caution

UK Forward Rates

0

0.5

1

1.5

2

2.5

1 2 3 4 5 6 7 8 9 10Years Forward

UK 1Yr Forward rates (%)

Source: Bloomberg

Economic Rebalancing?

UK Trade

-16,000

-14,000

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

Nov 05 Nov 06 Nov 07 Nov 08 Nov 09 Nov 10 Nov 11 Nov 12 Nov 13 Nov 14

UK Trade in Goods (£bn)

Source: Bloomberg

Currency Strength

60

70

80

90

100

110

Nov 05 Nov 07 Nov 09 Nov 11 Nov 13 Nov 15

Trade Weighted Sterling

Source: Bloomberg

Chinese Private Sector Leverage

Source: Bloomberg

100

120

140

160

180

200

220

Sep 05 Sep 07 Sep 09 Sep 11 Sep 13 Sep 15

Chinese Total Social Financing/GDP (%)

Sino the Times

Source: Bloomberg

0

5

10

15

20

25

Sep 05 Sep 07 Sep 09 Sep 11 Sep 13 Sep 15

Chinese Industrial Production YoY (%) Chinese GDP YoY (%)

Yuan Direction

5.8

5.9

6

6.1

6.2

6.3

6.4

6.5

Dec 13 Jun 14 Dec 14 Jun 15 Dec 15

RMB/USD

Source: Bloomberg

Eurozone lending rates are falling

EU Referendum

• Brexit?

• What are the terms?

• Who will lead the campaigns?

• How will refugee crisis evolve?

• What can we learn from recent elections?

• Consequences for FDI?

• Consequences for markets?

UK Fiscal Consolidation

Deflation is the only constant

0% 50% 100%0%

50%

100%

RussiaBrazil

India

ChinaAsia

UK

Japan

Eurozone

US USEurozoneJapanUKAsiaChinaIndiaBrazilRussia

INFLATION

GROWTH

RECOVERY BOOM

STAGNATION SLOWDOWN

Source: Bloomberg/Brewin Dolphin

• Economic recover seems set to continue• Decent jobs/wage growth• Housing• Private sector leverage a concern

• Global Trade remains a difficult environment• Europe improving• China slowing• Currency Strength

Summary

Disclaimer

The value of investments can fall and you may get back less than you

invested.

Past performance is not a guide to future performance.

If you invest in currencies other than your own, fluctuations in currency

value will mean that the value of your investment will move independently of

the underlying asset.

The information contained in this document is believed to be reliable and

accurate, but without further investigation cannot be warranted as to

accuracy or completeness.

The opinions expressed in this document are not necessarily the views held

throughout Brewin Dolphin Ltd.