Welcome to Taking Stock on Monday 25th September 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:
The UK economy is set to slow in 2023 and 2024 & why this is good for the markets
With inflation falling, experts now believe the rate will peak at around a lower-than-expected 5.75% in Spring 2024 before falling to just below 4% over the next five years.
TOP BUSINESS STORIES
Introduction: UK economy set to slow in 2023 and 2024
Economists at KPMG have predicted that UK growth will slow sharply in the second half of this year, as high interest rates, continued uncertainty and low productivity weigh on the economy.
They fear the UK could “struggle to keep its head above water in the second half of the year”, as “renewed signs of stress” hit the economy.
KPMG predicts UK growth will slow to just 0.4% this year, down from 4.1% in 2022, and slow further to just 0.3% in 2024.
Inflation is expected to slow, from 9.1% last year to 7.5% in 2023, and then 2.7% in 2024, thanks to easing supply chain bottlenecks and falling energy prices.
But, as KPMG points out, the global economy seems to be losing momentum too, with trade volumes shrinking and rising concerns over China’s economy.
There’s another risk too – businesses may be put off from investing in the UK until the general election has taken place. Uncertainty over the government’s fiscal plans, and key policies, risk deterring or delaying spending.
Evergrande shares dive 20% after group says it is unable to issue new debt
Shares in troubled Chinese property developer Evergrande have tumbled over 20% today, after its debt restructuring plan hit a roadblock.
Evergrande disappointed investors by revealing that it is unable to issue new debt, due to an ongoing investigation into its main domestic subsidiary, Hengda Real Estate Group.
This has thrown a spanner into Evergrande’s efforts to persuade creditors to approve a debt restructuring plan, following its filing for bankrupcy protection in 2021.
Shopping habits have changed for good, says Aldi
The cost-of-living crisis has changed shopping habits for good, according to the boss of Aldi in the UK and Ireland.
Giles Hurley says shoppers are buying more own label products than ever before and he expects this to stick.
Cheaper supermarket own label ranges are enjoying a boom as shoppers try to save money.
Aldi overtook Morrisons last year to become the UK's fourth-biggest supermarket. Alongside rival Lidl it has been the fastest growing this year.
Products that are sold under a supermarket's own name now make up more than half of everything shoppers buy, by value.
Screenwriters in the US say they have reached a tentative deal with studio bosses that could see them end a strike that has lasted nearly five months.
The Writers Guild of America (WGA) said it was "exceptional - with meaningful gains and protections for writers". WGA members must still have a final say.
It is the longest strike to affect Hollywood in decades and has halted most film and TV production.
A separate dispute involves actors, who are also on strike.
The writers' walkout, which began on 2 May, has cost the US economy around $5bn (£4.08m), according to an estimate from Milken Institute economist Kevin Klowden.