Economic Review – January 2019

Following another month of political shenanigans, it still remains distinctly unclear whether Theresa May will be in a position to deliver an orderly Brexit on 29 March 2019.

The UK economy recorded its weakest rate of growth in half a year during the three months to November 2018, hit by a combination of Brexit-related uncertainty and tough global trading conditions.

Global equity indices had a largely positive end to January. A conciliatory tone from the US Federal Reserve supported shares toward the end of the month. Keeping interest rates on hold, the Fed revoked its promise of “further gradual increases”, signalling it would be “patient” before making additional rate changes.

The latest retail sales statistics show that UK shoppers cut back on spending during the fourth quarter of 2018, adding to evidence of a consumer slowdown as Brexit approaches.

Although Brexit concerns have undoubtedly hit consumer confidence, there has been some positive news for the household sector with pay currently growing at its fastest rate in a decade and inflation falling to almost a two-year low.