Investors trade cautiously as OBR revises down Britain's outlook

Investors are torn between mixed earnings reports and data, fueling recession fears, and hopes that the central banks will ease their monetary policy. The FTSE 100 was down 0.35% yesterday, weighed down by commodity stocks, and was flat this morning.

A Times report revealed that the Office for Budget Responsibility has told the government that it overestimated the prospects for Britain's medium-term growth and that it will lower its forecasts by between 0.2% and 0.5% from its previous outlook of a 1.4% contraction this year and a 1.3% growth in 2024, + 2.6% in 2025 and + 2.7% in 2026.

However, on a brighter note, the Times said the OBR also said that any recession in 2023 will be milder than previously thought.

Among stocks, Aviva gained 2.5% after it said it recorded strong sales in Q4 in its general insurance unit. It also maintained its dividend guidance.

EasyJet jumped 10% after announcing it expects to post a profit for the full year thanks to high bookings into summer.

 

Things to read today:

Why passive investing makes less sense in the current environment (Financial Times)

Is a US Recession Near? Making the Call Is Trickier Than Ever (Bloomberg)

Gloomier UK economy growth prospects leave Jeremy Hunt with black hole in budget (The Times)