Comment: The UK economic comeback begins

The UK economic comeback begins

Ben Laidler, Global Markets Strategist at eToro says: “The UK recession has ended, with the green shoots of economic recovery the strongest they have been in over two years. Encouragingly, recovery spanned across sectors from manufacturing to services.

“GDP grew a greater-than-expected 0.6% in the three months to March, rebounding from the 0.3% contraction at the end of last year. The recovery has been led by rebounding business investment and manufacturing. 

“The stronger economy comes alongside the outlook for summer interest rate cuts and the recently weaker pound. This has been driving a long awaited relief rally in the overlooked FTSE 100, as well as providing some political relief in Downing Street.”

CRH builds on good conditions to start the year

Adam Vettese, analyst at investment platform eToro, says: “The fact that building materials cost more than they did and those costs are here to stay might have represented a cause for concern for CRH investors, but that simply doesn’t seem to be the case with revenues creeping up in what is ordinarily a slower quarter for the firm. 

“Strong cash generation is vital to the health of a company, and it has also allowed the Dublin-based firm to increase its dividend returns to investors, a move they will surely welcome. Increased share buybacks and a bumped up dividend will go further towards investors feeling good about the nearly 20% uplift shares have enjoyed already this year, and looking forward to further strong performance to come.

“We are in an election year and the outlook for infrastructure spending will of course play a part for the firm with a sizable footprint across the pond but guidance has been reiterated and shareholders will look to build on the gains already achieved thus far.”

IAG flies higher with record summer on the horizon

Javier Molina, Senior Analyst at investment platform eToro, says: “Looking ahead, the company anticipates an exceptional summer season, potentially setting new records for demand. Transformation initiatives and strengths in key markets such as North Atlantic, South Atlantic, and intra-European are poised to capitalise on this sustained demand and significantly impact revenues and results. Regarding the acquisition of Air Europa, which is expected to close before year-end, the decision from the European Union’s Directorate-General for Competition is still pending. To pre-empt any issues, certain concessions have been made, including relinquishing 40% of the flights operated by Air Europa in 2023 to other companies.

“With the testing quarters following COVID now behind them, the company is demonstrating its capacity to enhance profitability and operational efficiency in a challenging yet promising environment. With significant improvements in its financial results, effective cost control, and a clear strategy towards market expansion and consolidation, IAG positions itself as an attractive investment with growth potential as travel demand continues to recover and expand.”