Larry Fink: Britain is ‘undervalued’ and Yimbyism is essential
BlackRock boss Larry Fink has described British assets as “undervalued” as he indicated that more investment would be pumped into the UK economy.
The chairman of the world’s biggest investment company praised the urgency across Europe to deliver higher growth as he said that the UK had been “so smothered” by unnecessary regulation.
“[We] have allocated more capital back to the UK tactically now with the belief that in the short run, the new administration is trying to tackle some of the hard issues,” Fink told The Times.
“I have more confidence in the UK economy today than I did a year ago.”
Fink’s focus on infrastructure and Yimby tone comes as the Labour government is easing the UK’s strict planning rules.
Fink suggested that more of BlackRock’s $11.6 trillion worth of assets could be invested in the UK as he said economies across Europe had come across a “capitulation moment” where governments recognised that low growth had weakened their standing.
“It just resonated with me — that there are so many fundamentally strong attributes about the UK and Europe and they’ve been so smothered by over-regulation, by too much control,” he said.
“We added to our positions across the board with the idea that we believe the market was discounting too much negativity,” Fink said. “And we believe the negativity was probably not warranted.”
He also pointed to the Labour government’s drive to cut red tape and push to boost efficiency, namely at the Competition and Markets Authority, as a positive development that could help to boost growth.
“I don’t know what’s changed [faster decision-making], but it’s a good change.”
‘Environmental regulations prevent wind farms’
Chancellor Rachel Reeves has suggested that yet more regulations could be wiped out in the next year, including environmental regulations.
She said protection rules often prevented further green investment as she said regulations were not well thought out.
“Environmental regulations are now the biggest barrier to investing in renewable energy in the UK,” Reeves told a panel at the International Monetary Fund (IMF).
“That is not the purpose of environmental regulation but they’re the things that are holding up pylons being built. They’re stopping wind farms from being built.”
“We want energy infrastructure to reduce the cost of energy and we want better transport infrastructure.”
“At the moment the regulation in the UK holds that back,” Reeves added.
BlackRock have been among a number of investment firms which have moved to abandon ESG policies.
It was among a number of firms to have quit a climate change industry group after President Trump was elected in November.
Fink was an early advocate of ESG strategies but he recently said in an annual letter that wind and solar power “alone can’t reliably keep the lights on”.