Economic Review – November 2020

Chancellor Rishi Sunak has announced government spending plans for the coming 12 months as part of his Spending Review, delivered to the House of Commons on 25 November.

Updated official forecasts suggest the UK economy is set to suffer its largest annual decline in 300 years and will not return to pre-crisis levels until the end of 2022.

In November, vaccine breakthroughs and the decisive US election result provided a much-needed confidence boost to global stock markets. In the UK, the blue-chip FTSE 100 index recorded its best monthly performance since 1989, fuelled by growing optimism that a successful vaccine can activate a faster than expected economic recovery from the pandemic-induced recession. The index increased in value over £180bn in November, gaining 12.35%, to close the month on 6,266.19, the FTSE 250 followed suit, closing up 12.33% on 19,336.32.

Recently released statistics have revealed the UK’s rate of inflation increased in October as the pandemic had an upward impact on prices in several categories.

Official forecasts suggest failure to agree a post-Brexit trade deal will provide a blow to the UK economy as negotiations between the two sides enter their crucial final phase.