2023 should see interest and inflation peak and begin to fall say Shore Capital analysts, who suggested a more positive outlook for the coming year than the last.
Inflation is forecast to fall to around 4.5% by the end of this year, while interest will hit a similar figure and also drop into 2024.
Factors causing inflation to spike at over 11% in October will soften this year, say Shorecap, which suggested that hiked energy prices following the invasion of Ukraine were largely responsible.
“The likelihood of a recession remains, what is unclear is for what period of time it persists and how ‘deep’ it may turn out to be,” outlined Shorecap.
It added that global economic growth may slow to around 2%, with the US and Eurozone both experiencing recession too.
Despite this, analysts suggested UK equities offer “interesting opportunities,” with the FTSE All-Share Index offering the highest dividend yield among competitors of over 4.1%.
In 2022, the FTSE100 outperformed other major markets, with its flat overall performance “masking a notable recovery since mid-October,” said Shorecap.