Economic Highlights
16 December 2019
The latest PMI data for both Manufacturing (47.4) and Services (48.5) were both lower than expected and lower than last month, leaving the UK economy teetering on the brink of a recession
We expect to see an increase in public spending, with much of the benefit directed away from London and the South East. This, alongside the release of some pent-up capital investment, should be supportive for the domestic economy.Perhaps betraying a degree of wishful thinking, our opinion is that Mr Johnson will pivot towards a “softer” version of Brexit, especially now that his parliamentary majority is not as dependent upon the support of the hardline Brexiters of the European Research Group. It will be very interesting to see how members of this group are treated in forthcoming cabinet reshuffles. We also expect to see an increase in public spending, with much of the benefit directed away from London and the South East. This, alongside the release of some pent-up capital investment, should be supportive for the domestic economy.
Trump needs a half-decent economy to be re-elected, and Xi is struggling with his own domestic problems, notably a slower economy and the Hong Kong protests.Our long-held view on this situation is that it suits neither side to escalate a trade dispute now: Trump needs a half-decent economy to be re-elected, and Xi is struggling with his own domestic problems, notably a slower economy and the Hong Kong protests. But we also recognise that the resetting of the global balance of power is going to be unsettling for years to come, and so we are prepared for bouts of volatility.