Weak pound is a double-edged sword

Sterling’s weakness is good for the UK says Legal & General Investment Management’s credit strategist Ben Bennett – for now at least.

Though it’s not hard to see why the UK is an unattractive destination for foreign investors, the weakness of the pound is good for the UK economy in that it will boost exports and attract tourism.

However, if sterling continues to fall it could cause a combination of high inflation and muted growth.

Examining the impact on credit markets, Bennett says the global nature of companies issuing sterling-denominated bonds means it’s not necessarily a good time to buy, with some exceptions such as aerospace and retail companies.

Filmed by Legal & General Investment Management