Davide Serra from Algebris Investments at Algebris
Davide Serra is an Italian fund manager with a great track record.
He is warning on UK inflation and said that's one of the reasons that UK bonds are overvalued. Mostly, he's pitching the trade because Brexit will cost equal to 7% of GDP over the next 8 years.
He's also making the case that private debt is extremely high with low productivity.
He didn't touch on FX but there's a conundrum in his theory. Weak growth and poor productivity will keep economic activity low and that will keep the BOE on the floor. An inflation rise would have to be imported, so that's some kind of stagflation scenario. It's not clear what the BOE would do in that scenario so the GBP trade is a tough one.
