Corporate Earnings Set to Boom

The UK economy may suffer but corporate earnings will boom in 2017: That’s according to Caroline Simmons, deputy head of the U.K. Investment Office at UBS Wealth Management. She told me that earnings from FTSE 100 companies should grow in the “mid-teens” percentages in 2017 compared to 2016. That would be the first year of significant growth for those companies since 2011 (it’s possible they might have eked out a small earnings increase in 2016 but nothing like what’s expected this year.) That’s right, it’s been six years since investors in U.K.-listed blue-chips have seen any decent rise in earnings.

But there’s a bit of a catch: Much of the 2017 growth is expected to come from the energy and materials sector, which has a hefty weighting in the FTSE 100 and whose earnings are going gangbusters thanks to the recovery in commodity prices …