Economic Review – February 2019

With less than four weeks until Brexit day, parliamentary gridlock means it remains unclear whether the UK will leave the EU as scheduled, or whether the Brexit process will be postponed, or even completed at all.

A larger than expected budget surplus in January is set to give Chancellor Philip Hammond the opportunity to announce the lowest level of government borrowing for 17 years when he delivers his Spring Statement on 13 March.

Investor sentiment took a knock at the end of February as President Trump and North Korean leader Kim Jong Un failed to reach an agreement on denuclearisation of the Korean Peninsula, following two days of meetings in Hanoi. There are currently no plans in place for a third meeting. Although most global indices were weaker in trading following the disintegration of the Summit, they largely ended the month in positive territory.

The latest official employment statistics show that the UK labour market remains in a robust state of health with the total number of people in work rising to another record high.

The UK economy suffered a sharp contraction in December, which left the annual rate of growth at a six-year low amid continuing concerns over Brexit and a weakening global economy.