Marks and Spencer Group PLC (LSE:MKS) is the best placed to cope if there is a rise in UK unemployment over the next six months, according to US bank JP Morgan.
"Reporting across the general retail sector this month has, on balance, been disappointing," added the bank, "particularly from retailers weighted into spending from lower-income demographics".
"Similarly, we are mindful that the average 2025 UK mortgage stock rate is higher year-on-year and that the savings ratio could remain elevated, which can impact discretionary spending."
Shares prices have held up nonetheless, but JP Morgan sees the risk to earnings growing as the year progresses.
Marks & Spencer (overweight) is an exception as it continues to grow share in both divisions, could see support from food inflation, and has underperformed large-cap peers this year.
Kingfisher (underweight) is most exposed, due to the big-ticket nature of purchases at B&Q and Castorama in France, while AB Foods is vulnerable due to its lower-income demographics