Economic Review – June 2020

Our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.

Overview

‘NEW DEAL’ TO BOOST ECONOMY

The Prime Minister has set out government plans to deliver a post-lockdown economic recovery, with a promise to accelerate £5bn worth of spending pledges on a range of infrastructure projects across the country.

LONG ROAD TO RECOVERY BEGINS

Although data released by the Office for National Statistics (ONS) vividly shows the UK is in the midst of an unprecedented slump, more recent evidence does imply the worst may be over, with signs of a pick-up in economic activity.

MARKETS

Major benchmarks closed the month in positive territory, as some economic data boosted sentiment towards the end of the month. A record jump in US housing sales and a fourth straight month of growth in Chinese manufacturing, served to offset some concerns over COVID-19 infection rates.

INTEREST RATES ON HOLD

The Bank of England (BoE) left interest rates unchanged following the latest meeting of its Monetary Policy Committee (MPC), amid signs of recovery from the country’s unprecedented economic slump.

RETAIL SALES PARTIALLY REBOUND

Official figures show that UK shoppers have started to spend again with retail sales recovering some of the ground lost during the record slump in sales witnessed in April.