Life and pension funds are likely to remain sellers of UK equities and buyers of UK government bond irrespective of valuations, making it difficult for listed companies to raise new equity capital, according to research from Schroder Salomon Smith Barney.

Robert Buckland, European strategist at SSSB, said in its European Portfolio Strategist report:"'Given that they still collectively own £475bn (€715bn) of UK equities, equivalent to 41% of the total market, this represents a formidable obstacle for any rally."