Proactive Investors - London-listed companies are on course for a “protracted period” of growth as the UK economy rebounds from several years of high inflation and uncertainty.
Peel Hunt (LON:PEEL) analysts said in a note on Monday that a “mood change” across the UK should feed through to better earnings and growing investor confidence over the coming years.
“Whereas the story for 2022 and most of 2023 was less growth and more inflation, the story for 2024 so far is more growth and less inflation,” analysts wrote.
This comes after Russia’s invasion of Ukraine in early 2022 sent energy costs and wider prices skyward, fuelling a string of interest rate hikes.
A resilient job market, ongoing wage growth, subsiding inflation and a rate cut since have now all laid the groundwork for better times ahead, according to Peel Hunt.
This has coincided with a return of a “stable” political environment, following the likes of Brexit, since Britain elected a new Labour government in July, analysts added.
The investment bank highlighted a string of companies from a range of sectors likely to benefit from the improving economic picture, including NatWest Group PLC (LON:NWG), Premier Inn owner Whitbread PLC (LON:WTB) and Jet2 PLC (LON:JET2).
This also stretched to retailers, such as DFS Furniture PLC (LON:DFSD) and Topps Tiles PLC (LON:TPT), alongside hospitality firms, including Loungers PLC (LON:LGRS).
“The mood change in the UK is palpable, which should bring stronger earnings growth and increased investor appetite,” Peel Hunt said.