‘Mild recession’ for UK still a possibility in 2023, but there are enough reasons to be optimistic

[LONDON] The economic data coming from Britain does not make for pretty reading these days. Inflation stayed in the double digits in March due to higher food prices, and the International Monetary Fund (IMF) last week said it expects the UK economy to shrink by 0.3 per cent this year.

Still, some analysts say there is reason to be optimistic, even if only slightly. The economy did manage to avoid falling into a recession in the first quarter. The pound, which plunged against the US dollar in late September 2022 during former prime minister Liz Truss’ brief but disastrous spell in office, has since bounced back to about US$1.24 – close to a 10-month high.

In the past seven months or so, the FTSE 100 index of multinational companies has risen by 18 per cent, while the FTSE 250 equity index of mainly mid-sized local corporations has risen by 16 per cent.