Chancellor Philip Hammond blamed Brexit uncertainty for the UK economy expanding at its slowest annual rate in six years.
Figures released yesterday by the Office for National Statistics (ONS) showed GDP growth at 1.4% in 2018, down from 1.8% in 2017. For the final three months of 2018, GDP growth slumped to 0.2%, down from 0.6% in the third quarter.
Laura Foll has been at Janus Henderson since she joined its graduate programme in 2009 straight from university. Like many of her generation, she joined the workforce while the full ramifications of the financial crisis were still playing out and the country was deep in recession. “Thankfully, the company didn’t cancel its graduate recruitment scheme in the middle of the crisis. It was either this or go back home and live with my parents,” she says.
It’s hard to think of another event in recent memory causing more uncertainty for UK businesses than Brexit. Following the vote in June 2016, the FTSE All-Share index has underperformed the global benchmark MSCI World by 6.3% in annualised terms.
Some argue this makes UK companies a prime objective for bargain-hunters. However, investing in businesses that are particularly reliant on the health of the British economy remains a risky bet.
What does 2019 have in store for the investment trust sector?
Investors will be hoping for a better year after a difficult 2018. However, while there is cause for optimism, 2019 looks likely to be another year in which the macro dominates the micro. The political and economic drivers that have delivered a rollercoaster ride over the past year haven’t gone away. Expect more thrills and spills.
The state pensions of UK expatriates remain at risk from Brexit, a former pensions minister has warned, as the UK government has only agreed to pay pension increases on a reciprocal basis.
Last October, the Financial Conduct Authority (FCA) proposed new rules for open-ended property funds, designed to address the illiquidity of commercial property as an asset class. In future, it said, Oeics investing in property must be prepared to act even faster at any sign of a run on their funds, suspending trading if the valuation of 20% or more of their assets is at risk of ‘material uncertainty’.
We are told that the June 2016 European Union referendum was the biggest exercise in democracy that this country has ever seen. Really?
If democracy is all about deliberate deception, dishonesty and political spin, then the EU referendum was certainly a masterful display. I readily accept that the Remain campaign was flawed, but that reinforces the case that the result is unreliable.
MSCI, the global provider of stock market indices, has gloomily predicted that if Brexit takes the form of a no-deal, UK shares could fall as much as 25%.
As part of its stress test analysis MSCI took into account the Bank of England’s Brexit study, which assumes an 8% GDP contraction and 25% devaluation of the pound against the US dollar in a no-deal scenario.
The Royal Institution of Chartered Surveyors (RICS) says that 28% of surveyors expect sales to be either flat or negative across all parts of the UK over the next three months. It is the most pessimistic reading since records began in 1999.
Many surveyors who responded blamed Brexit uncertainty for the slump in the market.
Last night, prime minister Theresa May suffered a historic defeat in Parliament, with a massive 432 to 202 MPs voting against the prime minister’s proposed European Union withdrawal deal. May’s defeat means that the outline of the UK’s withdrawal from the EU – officially scheduled for 29 March – remains unclear.