Our 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. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements. We hope you will find this review to be of interest. For more information on this, click the below link.

SFFS Economic Review_Apr 21

Our 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. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements. We hope you will find this review to be of interest.

Although the latest gross domestic product (GDP) statistics revealed the UK suffered a record slump in 2020, there are now growing hopes the economy is on the cusp of recovery. Figures published by the Office for National Statistics (ONS), showed the UK endured a record fall in output last year as coronavirus restrictions ravaged the economy. Across the whole of 2020, GDP fell by 9.9%, more than twice as much as the largest previously recorded annual decline. However, the data did reveal a positive growth rate across the final three months of the year, meaning the UK avoided a double-dip recession. Furthermore, in the month of December alone, the economy actually grew by 1.2% after some lockdown restrictions were eased. While January’s reintroduction of stricter national lockdown measures is expected to result in first-quarter economic contraction, data from February’s IHS Markit/CIPS flash composite Purchasing Managers’ Index, paints a more optimistic picture of current activity than many analysts feared. SFFS Economic Review_Feb 21

Chancellor of the Exchequer, Rishi Sunak, delivered his second Budget on 3 March declaring that “we will recover”. The key fiscal event, which had been delayed from the Autumn due to the pandemic, centred on a £65bn three-part plan designed to continue supporting British people and businesses through the pandemic, ‘fix’ the public finances once recovery begins and lay the foundations for the future economy.

ECONOMIC FORECASTS:

The Chancellor began his statement by revealing the latest forecasts produced by the Office for Budget Responsibility (OBR) which provide hope of “a swifter and more sustained economic recovery” than previously expected. The economy is now forecast to grow by 4% this year and by 7.3% in 2022, which means it will regain its pre-pandemic level by the end of Q2 2022, six months earlier than November’s forecast implied.

In terms of public finances, the OBR expects government borrowing to rise to a peacetime record of £355bn in 2020/21 in order to fund the government’s economic support measures. As the economy re-opens and emergency fiscal support is withdrawn, borrowing is forecast to fall back to £234bn in 2021/22. The Chancellor did not set any new fiscal targets in this Budget, though he did acknowledge that tax rises would be needed in the coming years to help repair the public finances.

COVID-19 SUPPORT MEASURES:

Prior to Budget day, Mr Sunak had already announced a number of coronavirus support measures including an extension to the Coronavirus Job Retention Scheme, further support for a greater proportion of self-employed workers and details of the Restart Grant and traineeship schemes. During his speech, Mr Sunak reiterated that he “will continue doing whatever it takes to support the British people and businesses through this moment of crisis”, before confirming details of the various initiatives that will see total fiscal support rise to over £407bn over this year and next: SFFS Economic Review_Feb 21 SFFS Simply Wealth Spring Budget_Mar 21

Glimmers of hope for the New Year!

Over the past year, our vulnerabilities have been starkly exposed by coronavirus, and the pandemic
continues to present an array of challenges on many different levels. Economic frailties have also been laid
bare but, as we enter a new year, shoots of optimism are beginning to emerge, with rising hopes of recovery in
2021 and beyond.
A gradual recovery The International Monetary Fund’s (IMF) final 2020 assessment of global economic prospects was entitled ‘A Long and Difficult Ascent’. This provides an apt description of the current situation, with the international soothsayer’s predictions pointing to a moderate rebound in 2021 with a continuing gradual recovery
over the following few years.
Reasons to be cheerful While the IMF forecast does highlight continuing risks and uncertainties, which largely centre on the future path of the pandemic, there are reasons for some guarded optimism. Continuing progress in the search for COVID-19 vaccines and the economic stimuli promised by US President-elect Joe Biden, for instance, should both have a positive impact on market sentiment during 2021.
SFFS Simply Wealth_Winter 21

Our 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.
It is not intended that individual investment decisions should be taken based on this information; we are
always ready to discuss your individual requirements. We hope you will find this review to be of interest.

Vaccinations provide economic hope!

Although recently released data has revealed a decline in UK economic activity, Bank of England (BoE)
Governor Andrew Bailey, has expressed hopes that the vaccine roll-out programme will begin to spark a
“pronounced recovery.”
The latest gross domestic product (GDP) figures published by the Office for National Statistics (ONS) showed the UK
economy shrank by 2.6% in November, as fresh government restrictions to contain the pandemic hit the service sector.
This was the first reported monthly economic contraction since April and left GDP 8.5% below its pre-pandemic peak.
However, the decline was significantly smaller than most economists had been predicting and suggests companies
were better prepared for the second lockdown. ONS said many firms had  adjusted to new pandemic working
conditions, for example by expanding click and collect services or other online operations, while manufacturing and
construction generally continued to operate throughout November.
The third, stricter lockdown introduced  in early January is widely expected to result in economic contraction in the
first quarter of 2021, particularly as many businesses will also be adapting to the introduction of post-Brexit EU trade barriers.
There does appear to be a growing sense of optimism that the UK economy will recover relatively strongly over the
remainder of this year.
SFFS Economic Review_Jan 21