Another major name in the world of finance today advised clients that the “palpable” improvement in prospects for the UK economy has made it a good bet for investment.
City investment bank Peel Hunt said in research note that the UK was in a far better position after “years of damaging uncertainty” since the Brexit vote in 2016 and the stagnation that followed Russia’s full scale invasion of Ukraine.
Head of research Charles Hall and chief economist Kallum Pickering said: “We see the UK positioned for a protracted period of above-average growth, benefitting from increasing business investment, improving consumer demand, stabilising inflation, and lower interest rates.”
It said Keir Starmer’s Labour general election victory had brought “political stability and clarity” and a government with a “firm growth agenda.”
The note continued: "The mood change in the UK is palpable, which should bring stronger earnings growth and increased investor appetite.”
It flags up “three reasons or optimism”: healthy private sector balance sheets shored up since the financial crisis; improving economic fundamentals with more Bank of England rate cuts to come; and a stable centrist Government at a time of global populism.
Peel Hunt is the latest in a series of banks in the City and Wall Street to back the UK after years of being shunned by the world’s investment community since the Brexit referendum result
Bank of America said this week that the pound is set to be one of the world’s top-performing major currencies this year amid expectations of “above trend growth” in the UK economy. The Wall Street giant said the pound could hit $1.41 by the end of 2025, after reaching a 29-month high of $1.323 last Tuesday.
