Do macroeconomic factors influence the returns of the UK stock market?

Abstract

Our thesis investigates the influence of macroeconomic factors on stock prices in the UK, with a specific focus on the FTSE 350 stock market index. This analysis integrates a comprehensive review of previous studies with ongoing evaluation of recent data spanning from 1998 to 2022, concerning stock returns and macroeconomic factors. Our findings indicate that the Consumer Price Index (CPI), Unemployment rate, Money Supply and The Risk-Free rate show a significant impact on the stock market returns.