Economic Review – October 2017

Our monthly 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.

Overview

UK ECONOMIC GROWTH STRONGER THAN EXPECTED

The UK economy has shown some signs of resilience posting a higher than expected growth rate during the third quarter of 2017.

INFLATION RISES TO FIVE-YEAR HIGH

The rate of inflation in the UK has risen to its highest level since the spring of 2012, causing a further squeeze on real household incomes.

MARKETS

In the UK, market sentiment was stable at the end of October, as investors awaited the Bank of England’s interest rate decision and the release of October’s manufacturing report. The FTSE 100 Index closed the month trading at 7,493.08, a gain of 1.63% on the month. The FTSE 250 closed up 353.04 points at 20,227.86, a gain of 1.78%. While, the junior AIM also closed in positive territory, ending the month up 34.8 points or 3.47% at 1,039.06.

MILLIONS OF BRITONS FACING FINANCIAL DIFFICULTIES

A survey by the Financial Conduct Authority (FCA) suggests that over four million UK consumers are currently in serious financial difficulty while around half of the population are described as being financially vulnerable.

CHANCELLOR PREPARING FOR NEW AUTUMN BUDGET

The Chancellor of the Exchequer, Philip Hammond, is set to deliver his second Budget of the year on Wednesday, 22 November.