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
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