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.

The UK economy showed signs of resilience during the final quarter of 2017 recording a higher than expected rate of growth, although Brexit concerns still weigh on economic prospects. Official data released by the Office for National Statistics (ONS) suggests that gross domestic product (GDP) rose by 0.5% in the three months to December 2017. This preliminary fourth quarter estimate was higher than the 0.4% growth rate recorded during the preceding quarter, and 0.1% above the consensus forecast among City economists. The dominant services sector, which accounts for around 80% of UK economic output, was the main driver of growth in the fourth quarter, expanding by 0.6%. However, despite this growth in the final quarter, the data did show a weakening when compared with the same quarter a year earlier, particularly in relation to more domestic consumer-facing sectors, such as distribution, hotels, catering, transport and communications. Indeed, the ONS described the broader picture as one of “slower and more uneven” growth. Across the whole of last year GDP grew by 1.8%, down slightly on the 1.9% rate recorded during 2016 and the lowest annual growth figure since 2012.
The latest growth figures did certainly exceed market expectations and, in doing so, provided ammunition for those commentators who argue there is little sign of the Brexit-induced disaster scenario that many predicted.

SFFS Economic Review_January 18 (002)