UK's economy may not recover to pre-COVID levels before 2024

Highlights:

• The current challenges have prompted experts to predict that the UK economy may not return to pre-pandemic levels before 2024.
• This indicates that economic growth may be restricted until the next general elections.

UK households and businesses are struggling with soaring costs. There has been significant financial chaos in the recent weeks following the Chancellor's mini-budget, which led to the pound's downfall against the US dollar. The Bank of England has already warned that the economy will likely slip into a recession this quarter due to rising inflation, which is expected to go up this month due to rising energy bills.

According to the new analysis, the UK economy is unlikely to return to pre-pandemic levels before 2024. The analysts at Deutsche Bank said it won't be before 2024 that the country's Gross Domestic Product (GDP) will return to December 2019 levels, when there was no pandemic. This also indicates that the economic progress made during the next general elections will likely be restricted.

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In a recent survey of 5,200 firms conducted by the British Chambers of Commerce (BCC), over three fourth of the respondents said that they hadn't raised investment in the past three months. The study was carried out before the government's energy support package and mini-budget was announced last month, adding that the previous three months saw a sharp drop in business confidence.

Prime minister Liz Truss has argued that her government will revive the economy and promote growth through tax-cutting measures. However, experts believe that more details are needed on how the measures would help the businesses grow.

With the analysis highlighting the concerns about economic growth, investors can look at these two stocks that tend to perform better than others during such times.

British American Tobacco Plc (LON: BATS)

British American Tobacco is among the world's biggest tobacco firms. Investors generally prefer tobacco companies as they tend to have a steady demand in any economic situation, and they are able to maintain a healthy cash flow. BATS is an FTSE 100 stock with a market cap of £74,381.98 million. The EPS stands at 2.97, and the 12-month return is currently at 30.80%. On the other hand, the year-to-date or YTD return is 21.42% presently. As of 8:41 AM, GMT+1 on 10 October, shares of BATS traded at GBX 3,318.50, up 0.15%.

Imperial Brands PLC (LON: IMB)

Another major tobacco producer and seller is Imperial Brands, headquartered in Bristol. The IMB boasts a market cap of £18,922.63 million. Over the past 52 weeks, the share price has jumped over 31%, and the YTD return is 23.27%. IMB's shares were trading 0.33% higher at GBX 1,997.50 as of 8:48 AM GMT+1 on Monday.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.