Record UK Profits While Brexit Lurks

The most recent Profit Watch report from The Share Centre indicates that UK companies recorded record high sales and profits in the third quarter.

The best performance was recorded by multinationals such as Compass, the catering firm, which saw a 15.1% increase in revenues, driven by the exchange rate and overseas demand.

The same factors were at play for firms such as Ferguson, TUI and Associated British Foods.

Companies such as JD Wetherspoons, Mitchells & Butlers and WH Smith that focus more on the UK domestic market also grew, albeit at a slower pace.

One company whose results were not as impressive was EasyJet, which despite an increase of revenues, experienced a fall in profit due to the fall in the value of the pound and higher costs.

According to Helal Miah at The Share Centre:

"Whichever way you look at it, UK plc has performed well. Even without the added sheen of exchange-rate gains, we would have seen record-breaking results. Sales are climbing across the board, earnings are looking healthier still, and there is more to come"

However, he added that sectors that are more domestically focused such as construction are less certain to continue to perform well due to the continued uncertainty over brexit.

Mixed signals about the UK economy continue to be sent, with both an interest rate rise and the likelihood of the UK being worse off after brexit both existing at the same time.

Therefore the continued performance of the UK economy hinges to a great extent on which form brexit will take.

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