Tesco share price has been on a downward trajectory for the past week amid economic concerns in the UK. The stock has crashed by more than 20% this year and nearly 3% in the past month. As of the time of writing, the stock was trading 0.98% lower at 221.5p.

Economic Outlook

Tesco share price has been under intense pressure for the past week as concerns about UK’s economy grow. Data published by the Office for National Statistics last week on Thursday shows that retail sales volumes fell 0.4% in November 2022 following a 0.9% rise in the previous month.

Online retail sales volumes crashed by 2.8% in November, continuing a downward trend seen as early as 2021. Automotive fuel sales volumes fell by 1.7% in November while non-food store sales volumes dropped by 0.6%. Food store sales volumes rose 0.9% as customers stocked up early for Christmas.

The Bank of England raised interest rates by a half percentage point to 3.5% on Thursday. This was the highest interest rate hike level in 14 years. The BoE has been increasing interest rates for the past nine MPC meetings, the most aggressive set of rises since 1989.

Despite the rise in real Gross Domestic Product (GDP) in October, concerns about a long-lasting recession in the UK. Chancellor Jeremy Hunt has reiterated that the UK economy will get worse before it gets better.

Tesco Share Price Forecast

As I predicted in my last article, Tesco share price has been on a bear run for the past few days. The stock has moved below and above the 25-day and 50-day moving averages, respectively. Its Relative Strength Index (RSI) has been on a downward trend for the past few weeks.

Therefore, Tesco share price is likely to continue falling as bears target the important support at 200p. However, a move past the resistance at 239.5p will invalidate this bearish view.