Economic Review – June 2019

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

BANK CUTS GROWTH FORECAST

The Bank of England (BoE) has reduced its growth forecast for the UK economy amid growing concerns over global trade tensions and fears of a no-deal Brexit.

INTEREST RATES REMAIN UNCHANGED

The BoE has again left interest rates on hold and reiterated its belief that the monetary policy response to Brexit could ultimately push rates in either direction.

MARKETS

In the UK, the main blue-chip index, the FTSE 100, was in line with global markets as investors anticipated the bilateral meet. The index advanced +3.69% in the month to end on 7,425.63. The mid cap index, the FTSE 250 followed suit, gaining 2.59%. The mood was similarly lifted on European markets, as the Euro Stoxx advanced 5.89% in the month.

BREXIT LIMBO

While the Brexit process effectively remains on hold until the Conservative party membership elects the country’s next Prime Minister, further warnings over the potential consequences of a no-deal withdrawal have been issued.

SHOPPERS REIN IN SPENDING

The latest batch of retail sales statistics suggests that consumers have become increasingly cautious in recent months adding to concerns over the current state of the UK economy.