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.   In its latest policy statement, the BoE said it now expects economic growth to
be flat during the second quarter of this year, a downgrade from the 0.2% quarterly growth rate it predicted in May. This reduction partly reflects an anticipated hangover from the rapid level of stockpiling that was witnessed in the run-up to the original Brexit deadline in March.  However, the BoE also noted a darkening outlook for the world economy and suggested that downside risks to
growth have increased. Specifically, an intensification of global trade tensions and growing fears of a no-deal Brexit are major areas of concern. The BoE also highlighted a growing disconnect between the smooth Brexit underpinning its forecast and a potentially much
more chaotic one that markets increasingly appear to be predicting. Meanwhile, the latest economic growth data released by the Office for National Statistics (ONS) shows that the UK economy shrank by 0.4% in April compared to the previous month. This sharp contraction reflects a dramatic decline in car production due to factory shutdowns that had originally been designed to cope with disruption from a March Brexit, as well as a general easing of stockpiling right across the manufacturing sector.  In the three-month period from February to April, economic growth slowed to 0.3% from the 0.5% growth rate recorded in the first quarter of 2019. This was a sharper deceleration than most economists had been predicting and would appear to suggest that underlying growth is sluggish. This has led some economists to suggest that the UK is likely to experience a relatively subdued growth profile over the rest of this year.  to continue reading click SFFS Economic Review_June 19

New pensioners aren’t splashing the cash………………….When the new pension rules came
into force in April 2015, fears were
expressed that pensioners might
raid their pension pots to go on
a spending spree. The former
Pensions Minister Steve Webb,
famously remarked at the time
that pensioners could choose to
spend their savings on buying
a Lamborghini if they wished.
However, the evidence suggests
that this hasn’t happened.
Whilst the total value of pension
withdrawals made since April 2015 is
over £25bn, the average withdrawal
made between July and September
2018 was £7,597, the lowest
level recorded by HMRC since their
records began2 in Q2 2015.
Volatility playing a part
The lower level of withdrawals could
be a sign that pensioners were
reacting to market volatility and
concerned to preserve their wealth.
Managing withdrawals from pension
funds can be a challenge for those
unfamiliar with the stock market;
that’s why taking advice is so worthwhile.
Ensuring their pension funds
last as long as they do themselves is
a concern often by those approaching
retirement; we can help ensure
retirees make the right choices at
the right time……continue reading SFFS Simply Wealth_Summer 19

SFFS Economic Review_May 19 More →

The UK economy grew more strongly than expected in February as ‘preBrexit’ stockpiling provided a boost to the monthly rate of economic growth. Official gross domestic product (GDP) data released by the Office for National Statistics (ONS) has revealed that the economy expanded by 0.2% in February. While this does represent a relatively modest growth rate by historic standards, the figure was significantly higher than most economists had predicted and has eased potential fears that the UK economy could be set to stall or even contract during the first quarter of the year. A key factor behind this stronger than anticipated performance, however, relates to manufacturers’ stockpiling activity. Although ONS does not collect specific data on this area, it did state that survey evidence suggests some manufacturers changed the timing of their activities as the UK’s original planned departure date for leaving the EU approached, in order to minimise any potential disruption to supply chains in the event of a no-deal Brexit. February’s strong GDP data, therefore, appears to reflect a rush by manufacturers

to meet orders from clients stockpiling essential items ahead of Brexit. This point was further reinforced by the latest Confederation of British Industry (CBI) quarterly survey which showed that, in the three months to April, British factories stockpiled at the fastest pace since records began in the 1950s. Meanwhile, IMF managing director Christine Lagarde has warned that further uncertainty surrounding the Brexit process will undoubtedly have a negative impact on the UK’s future growth prospects. The warning followed the release of the IMF’s latest economic assessment with the new forecast suggesting the UK economy will expand by 1.2% in 2019, down 0.3% from the organisation’s previous prediction published in January.

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. 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.

Interest rates remain on hold:

The Bank of England (BoE) has once again left interest rates unchanged while reaffirming its belief that nearterm monetary policy will remain inextricably linked to Brexit. All nine members of the Monetary Policy Committee (MPC) voted to leave rates on hold following their latest meeting on 21 March. This marks the seventh month in a row that rates have remained unchanged since they were raised from 0.5% to 0.75% in August last year.