As the new year enters its second week, financial experts speculate about market growths and the possible highs and lows that may follow. Reportedly, the Goldman Sachs Group Inc. and Bloomberg Economics opined that the UK’s economic landscape will improve despite widespread flooding and industrial strikes.
Storms and strikes not flooding the positive outlook on the UK economy
As traders recently turned bullish on the sterling for the first time in three months, analysts believe the UK economy, which spent most of 2023 on the rim of recession, is on the rise. Bloomberg reports that stocks are also stronger, according to the latest retail statistics.
Realistically, this outlook can sour very quickly, especially considering the disruptions to the transport and health industries. Economists also warned that should inflation remain at its current mark or rise again, it would back the Bank of England (BOE) into a high-interest-rate corner, negatively impacting bonds.
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The pound, however, on the back of a weaker dollar, Maintained its increasing momentum, which started during the last few months of 2023. Even when the US currency bounced back somewhat during the past week, the pound sterling clung to its gains.
According to Bloomberg, Goldman Sachs predicted a sterling gain of $1.30 against the dollar, while Fidelity upped this even more to $1.40. On Friday, the pound sterling traded at $1.27 to the dollar.
UK house prices also held out against sombre 2023 predictions, bolstering the economic forecast further. Rising wages and anticipated BOE rate cuts predict good news for consumers in the coming year.
