Date: 12 December 2016
The UK economy: still cautiously encouraging
In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the latest UK economic data:
- The ONS revised GDP growth up to 0.6% in 2016Q3, whilst revising growth down to 0.6% in 2016Q2. There was, therefore, no slowdown in growth in 2016Q3.
- Retail sales growth remained strong in October, as did services sector growth.
- The labour market remains firm, with the unemployment rate at 4.8%.
- The Bank of England's latest Agents' report was quite positive.
- But the current account of the balance of payments widened in 2016Q3 and the public finances remained significantly in deficit.
- Moreover, inflationary pressures are picking up, reflecting higher oil prices and the effects of the weaker pound. Nevertheless, CPI inflation, at 1.2% in November, remains well within the Bank's 2% target.
- The Bank left monetary policy unchanged at its December meeting.
- The Italian government has agreed a €20bn fund to support the Italian banking sector, including Monte dei Paschi (Italy's most troubled bank). Any state 'bailout' must comply with the EU's new rules for bank rescues.
- There has been a 'spat' between Greece and its EU creditors. A recently agreed debt-relief scheme was put on hold because the Greek government implemented a fiscal handout without consulting its EU creditors. It has, however, been agreed that talks on the scheme will be resumed in January.
- There are key elections in Eurozone countries in 2017: the Netherlands (March), France (April and possibly May) and Germany (Autumn).
For full story: http://www.arbuthnotgroup.com/economic_perspectives_group.html
Press enquiries:
Arbuthnot Banking Group PLC:
Ruth Lea, Economic Adviser
07800 608 674, 020 8346 3482
ruthlea@arbuthnot.co.uk
Follow Ruth on Twitter @RuthLeaEcon
Bell Pottinger:
Dan de Belder
020 3772 2561
ddebelder@bellpottinger.com
Arbuthnot Banking Group plc published this content on 12 December 2016 and is solely responsible for the information contained herein.
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