Merryn Talks Money: The UK Economic Outlook Is Looking Bright

All too many commentators on the UK economy are “default decliners,” according to Simon French, chief economist and head of research at UK investment bank Panmure Gordon: there’s nothing they can’t put a lousy spin on.

French and Janus Henderson portfolio manager Laura Foll join this week’s Merryn Talks Money to share their UK economic outlook for 2024. The data on the British economy isn’t looking bad at all, French says—certainly not as bad as the numbers coming out of Germany.

With inflation still falling and wage rises on the way, real incomes may soon rise. So with rate cuts also on the cards, UK households should do just fine this year, says Foll, which is good news for UK companies and smaller companies in particular. She points out that UK business confidence is actually above its long term averages—the only major European country where that’s true.

Meanwhile, the UK equity market has been in the doldrums for years. But recently there has been a shift in sentiment: Investors used to dispute the relative value of the UK, blaming it on a bad macro environment or low growth sector mix. Now most agree that it’s very cheap indeed, though they want to know what the catalyst for change will be before they move money in.

French says focus on the budget, be it new rules for pension funds to make them invest in UK equities or perhaps a Brit Isa. French and Foll differ though when it comes to the UK housing market. French sees prices falling while Foll says they’ll rise. Listen in for their reasons.