OpenClose
Andy Raikes

Market Outlook

Q3 UK Outlook

Outlook
12 October 2026

By

Portfolio Manager, TT UK Equity Strategy

Latest UK economic and market outlook. 

clock

We remain constructive on the outlook for UK equities. Valuations continue to look attractive, with compelling opportunities across both large- and mid-cap companies. The portfolio remains relatively balanced with a beta around 1. We remain overweight mid-caps, but continue to be selective within this segment. Where we own domestically focused companies, we favour businesses with relatively low economic sensitivity. Our more cyclical holdings in mid-cap tend to be international companies whose prospects are not dependent on a recovery in the UK consumer.

Industrials remain a key area of conviction. Within construction, we favour companies such as Kingspan, Balfour Beatty and SigmaRoc, while our industrial support-services exposure includes Serco, which we added to during the quarter. These companies have structural growth drivers, attractive order books or opportunities for self-help that should allow them to grow even against a subdued economic backdrop.

We also remain overweight Basic Materials. We took profits in Rio Tinto following strong performance but maintained our significant overweight in Glencore. The company benefits from exposure to copper and thermal coal, while its marketing division continues to perform strongly amid elevated commodity price volatility. We added to precious metals exposure on short-term weakness. The recovery in gold during the quarter supported Endeavour Mining and Wheaton Precious Metals.

We increased our Energy exposure during the quarter by adding to BP and Serica Energy. However, we remained underweight the sector overall, which impacted performance in Q3 as oil prices rallied sharply. BP continues to offer meaningful scope for operational and financial self-help.

Elsewhere, our Consumer Staples exposure remains focused on selected mid-cap food related companies, including Cranswick, Glanbia and Greencore, rather than the larger traditional staples businesses. We continue to see attractive long-term opportunities across these holdings despite recent share price volatility. Within Healthcare, we favour equipment and services companies such as Convatec and Uniphar, alongside AstraZeneca, which we added to on weakness.

Overall, the portfolio remains balanced between structural growth, self-help and attractively valued cyclical companies. We have taken some profits in UK banks following their strong performance, reflecting both valuation discipline and the possibility of higher taxation in the forthcoming Budget.

Important Information:

Nothing in this document constitutes or should be treated as investment advice or an offer to buy or sell any security or other investment. TT is authorised and regulated in the United Kingdom by the Financial Conduct Authority (FCA).

If you would like information on TT’s products, please contact:

Receive our insights

Sign up to receive regular investment updates and insight about products that interest you:

Sign up now