Economic Review – February 2017

In the latest ‘Household Finance Index’ from IHS Markit (HFI), released in mid-February (which is designed to anticipate the change in consumer spending behaviour), it was disclosed that their research has shown the strongest upturn in workplace activity for 14 months, as job insecurity continues to recede and income levels have increased since the turn of the year.

Continuing the good omens for the UK economy, Gross Domestic Product (GDP) has increased by 0.7%, according to the latest official estimate from the Office for National Statistics (ONS). This is an improvement from their previous forecast of 0.6%. They cite a marked improvement from the manufacturing sector as a major factor.

All the equity markets covered here maintained their bullish stance in February as the world digested the events following Donald Trump’s triumph in the US presidential elections, and the UK shrugged off any remaining worries surrounding the Brexit decision.
Here in the UK the FTSE100 continued its New Year bull run rising 2.3% in the month to end at 7,263.44, for a year-to-date 1.69% improvement. The wider FTSE250 did even better, closing at 18,770.71 for an increase of 3.4%, with the junior AIM market following suit with a 2.67% increase to finish the month at 907.2.

The latest figures from the ONS reveal that the UK saw inflation, as measured by the Consumer Prices Index (CPI), rise to 1.8% for the year to the end of January 2017. This is an increase from the previous recorded level of 1.6% in the year to December 2016 and now sees inflation at its highest level seen since June 2014.

In today’s economic climate, it is interesting to note that many people are now aspiring to self-employment rather than the traditional employed route. Echoing this fact is a recent report from the economic think tank the Resolution Foundation, who have undertaken some interesting research on the subject.