IMF forecast further adds to pessimism related to UK economy
|Today’s IMF forecast further outlines the declining and difficult state the UK economy is in with inflation outpacing most EU countries and as it continues to feel the real impact of Brexit on both the workforce and the prices of goods and services. Furthermore, while the economic sanctions imposed on Russia have had somewhat of an impact on the country’s economy, particularly at the start of the conflict, they have backfired and have made living conditions in the UK even more difficult with energy costs several times higher than what they are in the US despite natural gas prices dropping significantly over the last month. One of the standouts of the report is that Russia is actually set to outperform the UK economy where inflation remains close to 40 year highs and where strike action and political turmoil continue to hinder any potential for recovery after the Covid-19 pandemic. All in all, the situation for the UK does not look good under most metrics and the IMF’s forecast only adds to that pessimistic sentiment which at this point would require some major developments to shift.
Pets at home shares soar 13% after report
Pets at Home now expects FY23 group underlying pre-tax profit to be towards the upper end of the consensus range of £126m to £136m. This is ahead of previous guidance of around £131m. Shares jumped over 13% at the start of Tuesday's session following the report and reached the highest level since mid august 2022 before pulling back slightly. This comes after a difficult start to the week and growing uncertainty related to the general macroeconomic situation with consumers facing increasing cost of living issues. Both the reported increase in revenue and rise in share price could be considered encouraging signs for the company as it heads into the new year, but the key will be maintaining this positive performance and not disappointing investors now that the bar has been raised or risk a potential noticeable drop in share price.
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