The effect of Brexit has been the main concern across the U.K. And foreign markets. If this number and others continue to show a slowing pace Or negative numbers then the pound and the FTSE will be hammered says Meir Velenski
The UK first quarter GDP slowed showing a drop from 0.7% to just 0.3%.
What does this mean for the economic outlook?
The data coming through is much weaker then expected and this follows on from the Us ISM manufacturing index also slowing to 54.8 from 57.2.
Just a reminder that this number has been rising over the last 18 months and has shown steady growth.
If this slowdown continues then it maybe one of the signs that the economy is slowing and cannot keep pace with the recent growth.
The effect of Brexit has been the main concern across the U.K. And foreign markets. If this number and others continue to show a slowing pace Or negative numbers then the pound and the FTSE will be hammered.
In addition , the costs of raw materials and imports into the UK have sharply risen and and this is being fed through to the inflation component .
This can also be seen in inflation numbers in the Eurozone which has seen inflation jump.
With elections now in the UK, France and other countries in Europe approaching no one is really clear how to angle their portfolios on a retail basis or institutions to mange their books on a corporate basis.
The elections on all fronts though give everyone an opportunity to realign their thinking and look forward to the next 4-5 years of stability assuming significant victories for the center parties
Overall, the UK elections and the French elections will be the most watched and will give us guidance as to how to manage expectations .