5th December 2023

Domestic economy is under pressure but the market is cheap-Hargreaves Lansdown

Emma Wall, head of investment analysis and research, comments:

"As for most developed markets, the growth outlook for the UK is underwhelming, with GDP expected to grow by 0.6% next year, with a lingering risk of recession. Inflation is likely to trend lower but remain elevated, versus both the US and Bank of England target for some time.

But good news for investors–this bad news is priced into the market. The UK stock market has traded on a discount to its international peers for a number of years–first Brexit, then a lack of tech stocks, and a political maelstrom have made the US more attractive on a relative basis. But we believe there are some great companies in the domestic market being unfairly discounted. And while volatility is likely to continue through 2024, on a long-term view this could be a great opportunity to pick up cheap stocks with international revenues, attractive dividends, good dividend cover and robust balance sheets."

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