Making money: what the experts think
● Darling buds
There seems to be no stopping the FTSE 100, which hit another record high this week as stock markets globally continued to rally, said Anna Wise in the Evening Standard. Investor spirits were lifted by hopes of a pause in the Israel-Hamas conflict.
But the “feelgood factor” is strong in London, said Susannah Streeter of Hargreaves Lansdown, as “buds of May hopes unfurl” about interest rate cuts. Economic data is expected to show the UK has formally emerged from recession, said BBC Business. But the shadow chancellor, Rachel Reeves, struck a warning note in a City of London speech – accusing the Government of “gaslighting” Britain over the economy. Suggestions of a feelgood factor, she said, are “out of touch with the realities on the ground”.
● Labour appetiser?
Reeves might be downbeat about the economy, said Eir Nolsøe in The Daily Telegraph. But some in the City are pretty upbeat about her. Charles Hunt, of investment bank Peel Hunt, believes a Labour government would boost the London stock market “by making Britain more attractive to foreign investors”. UK shares are now “sold at a 20-25% discount relative to rivals on markets overseas”. But if a new government reverses Britain’s reputation for instability, it could chip away at this discount. What foreign investors need, he said, is the assurance that “there are grown-ups back in the room”. Investors are still facing “a crisis of confidence”, said Ruth Sunderland on This is Money. According to the Investment Association, March marked “the 32nd month in a row” of net withdrawals from UK equity funds. More than £38.1bn was withdrawn in 2023 – the worst year on record.
● Home patch
Is confidence returning to the housing market? Up to point, said Sam Unsted on Bloomberg. Halifax data showing prices rose by 0.1% in April contrasts with a “decline” reported by Nationwide. Overall, the picture is of “a stagnating UK housing market”. Estate agent Savills reckons the medium-term outlook is much brighter as the “mortgage crunch eases”, said The Daily Telegraph. It has upgraded its fiveyear price growth forecast from 17.9% to 21.6%, forecasting a £61,500 rise in the average house price, to £346,500, by 2028.