Analysis-Investors call 'peak pessimism' for beaten-up UK stocks

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By Naomi Rovnick LONDON (Reuters) - Long-term gloom about Britain's economy appears to be lifting and some big investors reckon the end of extreme ...

STORY CONTINUES BELOW THESE SALTWIRE VIDEOSBy Naomi Rovnick

UK-based investors said they are increasing holdings of domestic businesses and taking advantage of low valuations for the FTSE-100. Consumer stocks are outperforming as investors bet on the UK cost of living crisis becoming less intense. The Bank of England is expected to hike rates again this month, exacerbating stress for homeowners due to the refinancing of fixed-term mortgages at higher costs.But after UK households endured the biggest inflation shock for four decades and a cost-of-living crisis, wages are now growing faster than prices. Energy bills are expected to drop to a two-year low next month.

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