Why searching for growth is the key to outperforming the market

Taking Stock on Tuesday 10th October 2023

Taking Stock: Is a look at today's top business news & investment views plus we cover the winners, losers, the most read company news & the most followed. Today this includes:

Why searching for growth is the key to outperforming the market especially in a low growth environment, which the IMF predicts will happen...

The UK faces another five years of high interest rates to stem rising prices, an influential global group has warned.

The International Monetary Fund expects the UK to have the highest inflation and slowest growth next year of any G7 economy including the US, France, Germany, Canada, Italy and Japan.

However, the Treasury said recent revisions to UK growth had not been factored in to the IMF's report.

The IMF, an international organisation with 190 member countries, has said the forecasts it makes for growth the following year in most advanced economies have, more often than not, been within about 1.5 percentage points of what actually happens.

In July last year, it forecast that the UK economy would grow by 3.2% in 2022. It revised that upwards to 4.1% at the start of this year.

But official UK figures released last month estimated that the country's economy actually expanded by 4.3% in 2022.

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TOP BUSINESS STORIES

UK grocery inflation eases to lowest level since July 2022 - Kantar

British grocery inflation eased to its lowest rate for 15 months heading into October, industry data showed on Tuesday, providing more relief for shoppers hurt by high prices and for the government whose key economic pledge is to bring inflation down.

Market researcher Kantar said annual grocery inflation was 11% in the four weeks to Oct. 1, down from 12.2% in its September report.

“Grocery price inflation is still very high, but shoppers will be relieved to see the rate continuing to fall," Tom Steel, Kantar's strategic insight director, said.

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UK consumers hunker down as fuel prices climb

Consumers in Britain held off on much of their non-essential spending last month as rising prices for motor fuel compounded the broader hit from the high cost of living, according to data published on Tuesday.

The British Retail Consortium said total sales at chain stores grew by 2.7% compared to September 2022, weaker than a 4.1% increase in August.

"Sales growth in September slowed as the high cost of living continues to bear down on households," BRC Chief Executive Helen Dickinson said, citing the recent increase in the price of petrol and diesel as well as a rise in housing costs.

Expensive items such as furniture and electricals performed particularly poorly while last month's warm weather hit sales of autumnal clothing, Dickinson said.

Separate data from Barclays showed the pace of annual growth in the amount of money spent on credit and debit cards increased to 4.2% in September from August's 2.8% rise, but the acceleration was largely due to higher outlays on motor fuel.

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China-exposed European stocks rise after report of new stimulus

China-exposed European stocks rose on Tuesday after Bloomberg reported China is looking to increase its budget deficit for 2023, part of a new round of stimulus to help the economy.

Stephane Ekolo, global equity strategist at TFS Derivatives, said the news was "absolutely" driving price action in European assets.

"When China sneezes, the world catches a cold, so a new potential stimulus is seen as a positive catalyst," Ekolo said.

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