UK markets returned from the Easter break with a real spring in their step, helped a positive end to yesterday’s trading session on Wall Street.
AJ Bell investment director Russ Mould said: “While the latest economic data from China has been weak, that provides both the incentive and the ability to ease monetary policy and launch stimulus spending in areas like infrastructure to help revive growth.
“Mining stocks helped power the FTSE 100 higher as investors reacted to the possible implications for demand. Firmer oil prices lifted BP and Shell, the former of which announced a partnership with smaller peer Harbour Energy to develop a carbon capture project in the Humber estuary.
“Anyone groaning under the weight of much heftier mortgage payments may welcome the IMF’s prediction for a return to pre-Covid ultra-low interest rates in the UK.
“However, the implications for the British economy are less than favourable. A combination of falling productivity and an ageing population is expected to tame inflation but at the cost of constraining economic growth. The equivalent of someone being told they can no longer walk but at least they won’t fall over.
“The headlines from the latest retail sales figures may have made for reassuring reading – and retail stocks were higher on Tuesday morning – but there were some signs in the underlying data that the recovery seen in the first two months of 2023 is starting to falter.”