Link to article: https://www.cnbc.com/2023/02/23/uk-economy-in-a-lot-better-shape-than-bleak-figures-suggest-fund-manager-says.html
The UK economy only contracted by 0.5% in December 2022, leading the country out of a widely anticipated recession.
Bank of England has projected that UK has entered a shallow recession at the start of 2023 that will last for 5 quarters but oil prices remain high and rising interest rates restricts spending.
However, Brough, a British asset manager, said that there is more resilience from consumers as they are still spending, which is quite the opposite from what people would expect from a recession. He also warned that people should not take this information as the contraction of the current market as most of the businesses w doing "okay".
He still sees companies making dividend increases and providing good earnings statements, which means the market is in a lot better shape than what the GDP number is saying. He also mentioned that "out of 7 wonders of the world, calculating GDP growth is the 8th", implying how complicated it is only to get the GDP number.
3 comments:
Although the UK economy didn't regress as badly as analysts previously stated, I still have concerns about the ever-increasing costs of living in the country, in the wake of Brexit and the war in Ukraine, and am interested in trying to see the effect of this issue on the UK economy.
I am sure that it is nice to see some stability coming to the UK after moving through 5 prime ministers in the past 3-4 years. Although Brexit has not, and will not go as planned, people are starting to be more comfortable with spending their money and investing in economic growth. There has not been a huge increase in business investment from UK, so it is surprising to see that it is doing well. I can see why they would call this the 8th wonder of the world.
It's strange, I stay pretty up to date with the news and the UK's economy was big in the news for a while but has disappeared from the major news until now. It's a relief to hear the UK finally recovering especially with their political troubles and strange changing hands of power like the Truss administration.
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