Despite the negative outlook on the UK market due to various issues in 2022, including rising interest rates and inflation, the market currently stands to have an optimistic future. According to the FTSE index, Britain’s stock market appears to be significantly rising, with the largest public companies in Britain meeting a record high, alongside unexpected GDP growth. In light of this, Claire Trachet, CEO/Founder of business advisory Trachet, argues that whilst some headwinds will remain in the first half of this year, H2 could be a positive period for investment and M&A activity in the UK.

The FTSE’s growth appears to be driven by the recent strong stock performance of several big corporations, as a result of market capitalisation, this includes AstraZeneca, Shell, HSBC Holdings, Unilever, BP, Diageo and Rio Tinto. However, the strength in the market does not stop there.

After a loss of a third of value last year in the retail sector, the FTSE 350 retail index has risen by 9.4% this year. This comes to light as Rishi Sunak announces his pledge to cut inflation down, while simultaneously working to grow investment in local communities by creating new jobs that will strengthen high streets and town centres. While the current cost of living crisis remains apparent, experts have predicted that inflation will gradually slow down and living standards will begin to recover this year.

M&A expert, Trachet, says that the optimism and stability of the market will in return have a positive effect on M&A’s and investments. Although the CEO understands the M&A sector suffered a slowdown towards the end of 2022, she believes it is expected to significantly increase in 2023:

“From what we have seen so far in 2023, it is clear that there is great potential for the market to stabilise faster than expected. Interest rates are set to decrease, and inflation could begin to subside, which would reduce a level of uncertainty in the market that has been problematic for investors and dealmakers. Having had to navigate a turbulent period over the past year, the UK is now filled with a host of resilient startups that I expect could attract the attention of investors – both domestic and globally – in 2023.

“Despite the negative narrative surrounding the UK’s economic outlook, I believe that Britain remains an attractive option for investors from abroad and we could see a resurgence of activity in the second half of this year once some of the headwinds from 2022 have subsided. It seems Rishi Sunak is being seen by many investors as a safe pair of hands, with many having faith in his plan to tackle inflation.”