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No UK recession fails to lift markets

by LLB Editor
10th Feb 23 10:21 am

News that the UK has managed to avoid being in a technical recession gave a small lift to the pound, putting it briefly at $1.2130, but still some way off the $1.2434 level seen in January. Zero GDP growth is hardly a reason to celebrate, and markets are certainly not jumping for joy.

Russ Mould, investment director at AJ Bell, said: “The FTSE 100 slipped back 0.3% as a stronger pound is bad for the large number of companies which earn in US dollars but whose share prices are sterling-denominated. Miners certainly fall under this category and the broader basic material sector was down in the dumps on Friday.

“The FTSE 250 is often viewed as a better proxy on the UK economy, although it too has plenty of foreign earners. The ‘no recession’ news wasn’t enough to lift the FTSE 250, with the mid-cap index falling by 0.5%. Here, the culprits included ITV which is a play on advertising demand – something that’s likely to be muted if there is no economic growth.”

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