End of UK stock market growth, part two!!

In the previous blog I commended Chris Dillow's article in the December 14th-27th issue of Investors Chronicle, which examines the possibility of the British stock market going ex-growth. Performance has only held up due to the contribution of the tobacco, banking and mining sectors. Dillow notes that UK shares are cheap and the factor behind this is that investors have recognised the ex-growth nature of UK quoted PLC.

Factors include foreign competition and more money taken by the workforce.
Chris Dillow writes "John Terry, Brad Pitt and Jonathan Ross earn big money because their employers need them more than they need their employers." I dispute this. For instance, Arsene Wenger has kept the pay levels relatively down by transferring anybody who wants silly money such as Ashley Cole.

Another possible factor in the lack of growth in the British stock market is that pension funds are choosing UK gilts (government bonds) instead of equities.