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After a five-year slog, the British economy finally seems poised to turn the corner.自存倉Economic growth, while still meagre, accelerated to 0.6 per cent in the second quarter of this year. Employment is rising, the housing market is slowly recovering and consumer confidence hit a three-year high last month.This nascent recovery is expected to be cemented by the Bank of England signalling that interest rates will remain low for several years to spur the economy, even as the United States Federal Reserve considers tapering back its own stimulus measures.The looming deviation between the two nations' monetary policies is good news for the British stock market, as growth is likely to be weaker in Britain than in the US and will thus need more stimulus, said senior portfolio manager and economist David Hollis at Allianz Global Investors (AllianzGI)."If rate expectations are anchored at low levels, a more permanent recovery can take hold with growth accelerating the deleveraging process," he said."The prospect of a divergence in monetary policy between the two nations should support a cyclical rebound in the UK economy and, with it, those stocks reliant on domestic demand."Citi economists agree. With central banks in Europe and Britain turning more accommodative just as the US heads in the other direction, "European and UK stocks could be in a short-term sweet spot", they said in a report last week.Equities on the continent are likely to benefit from factors such as looser monetary policies, relatively attractive valuations, possible surprises in terms of economic and earnings data, and the fact that they are "out of vogue" at the moment, Citi added.An apparent stabilisation in Europe's economy should give British companies a lift as well, Mr Hollis said.Business activity in the euro zone expanded last month for the first time in 18 months, according to the latest purchasing managers' index survey released last Monday."A recovery in the euro zone during the second half of this year is slowly taking shape, with sentiment indexes having recovered already, such that those UK companies reliant on external demand should also see an improvement in earnings," Mr Hollis said.Although British stock price迷你倉新蒲崗 have risen already, after US stimulus measures, resulting in higher price-earnings multiples as earnings have lagged, the British stock market still "appears cheap on a historical comparison", he said.While the firming of domestic and euro zone demand will lend support to most British companies, those with exposure to faster-growing emerging markets are likely to be the outperformers.Insurance group Prudential, for instance, rode out the global financial crisis by making the most of its dominant presence in Asia, posting healthy results last year and in the first quarter of this year. The group derives more than half of its new-business profit from Asia.In the first three months of this year, its new-business profit rose 5 per cent from levels a year ago - following an 18 per cent rise in the Asia segment - to reach ¢G563 million (S$1.1 billion), it said.The group added that it is on track to achieve its Asia growth objective for new-business profit from the region this year - to double the figure posted in 2009.Another Britain-based group banking on growth in developing markets is Reckitt Benckiser, better known as the maker of household products such as Dettol and Strepsils.The household and personal care company generates 44 per cent of its sales from emerging markets, and has enjoyed a steady increase in its pre-interest and pre-tax profit margins over the years. Its strategy is focused on niche positioning, innovation, rigorous cost control and strategic acquisitions.Both Prudential and Reckitt are featured in the Allianz Europe Equity Growth fund, which identifies and invests in quality companies in Europe demonstrating growth in earnings and cash flow that is structurally above average.The two companies are among the fund's top 10 holdings. Other firms in the top 10 include German software giant SAP, Danish beer manufacturer Carlsberg and Spanish fashion group Inditex.The fund, which employs a pure bottom-up stock selection approach, takes a long-term investment view of three to five years, and offers an alternative channel for investors looking to buy into world-class European brands with promising growth prospects.A series on investing brought to you by Allianz Global Investors迷你倉出租