Serrari Group

Goldman Sachs announced an upward adjustment to its gross domestic product (GDP) forecasts for the UK, increasing its estimates by 0.1 percentage points for both 2025 and 2026. The investment bank now expects the UK economy to grow by 1.6% in 2025 and 1.5% in 2026. This revision reflects confidence in Labour’s fiscal policies, anticipated to boost demand growth in the near term.

According to Goldman Sachs economists, “Reforms to the planning system could boost housebuilding and productivity; higher public sector investment could lift potential output; and closer trade ties with the EU could mitigate some of the costs of Brexit.” However, they also noted potential risks, such as increased taxation affecting investment incentives and Labour’s commitment to reducing net migration impacting labor supply.

Market Reaction

Following the election results, the UK stock market showed a positive response. By 10:30 a.m. local time on Friday, the FTSE 100 had risen by 0.29%. The FTSE 350 household goods and home construction index saw a significant increase of 3.81%. Major companies in the sector experienced notable gains: Persimmon shares climbed 4.65%, Taylor Wimpey rose 4.2%, Barratt Developments increased by 3.45%, and Bellway moved up by 2.93%.

Outgoing Prime Minister Rishi Sunak conceded defeat early Friday morning, paving the way for Keir Starmer, leader of the Labour Party, to assume the role of Prime Minister. This change in leadership is expected to bring substantial policy shifts.

Analyst Insights

JPMorgan also weighed in on the election outcome, noting that Labour’s plans to relax planning regulations and implement other reforms “fairly quickly” could stimulate growth, although the impact might be modest and gradual. “This could spur growth to some degree, but the magnitude is likely to be small and take time to occur,” JPMorgan stated.

Looking Ahead

The Labour victory has prompted discussions about the UK’s economic future, with a focus on the potential impacts of increased public sector investment and enhanced trade relations with the European Union. These measures could help address some of the economic challenges posed by Brexit and lay the groundwork for sustained growth.

As the UK transitions under new leadership, the implementation of Labour’s policies and their effects on the economy will be closely monitored. For now, financial markets reflect a cautious optimism and a renewed sense of opportunity.

photo source: Google

By: Montel Kamau

Serrari Financial Analyst

8th July, 2024

Share this article:
Article and News Disclaimer

The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.

The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.

The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.

Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.

Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.

By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.

www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.

Serrari Group 2023

 

×