29th September 2023

Market Report-Hargreaves Lansdown

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, comments:

“The UK economy has shown signs of life. GDP is now 1.8% ahead of pre-pandemic levels as the economy grew 0.2% in the second quarter from the first three months of the year. Crucially, GDP was up 0.6% from the same period the previous year, which was better than expected and has given the pound a shove in the right direction. A particular area of strength has been manufacturing, especially motor vehicles. While momentum is overall positive, these levels of growth aren’t exactly shooting the lights out. Higher interest rates are playing their part in turning the nation’s economic thermostat down and this will play a key role in upcoming interest rate decisions.

The pound has extended its gains against the dollar and the market seems to be lapping up the good news too. Moving forward there are some things to consider though. Pound strength has the ability to dent sentiment towards the FTSE 100, because many of its constituents are export-reliant, and a stronger pound is less lucrative. The dreaded recession-risk-can has been kicked down the road once again, but that doesn’t mean the UK’s economy is primed to flourish and concern now turn to whether businesses and the market can ward of concerns off stagflation."

Hargreaves Lansdown Trends(174 articles)