The fact you are looking for, or already receiving advice from us would indicate that a career in financial planning is not for you. We’ve designed our resource centre so that you can dip into subjects or linger on those that interest you most. Nothing beats personal advice in our view but we hope you find the information available here useful.
Economic Overview – August 2017
The Consumer Price Index (CPI) increased to 2.6% in June and remained at 2.6% in July, where it was widely thought it would edge up higher. As a result, the pound fell back against the dollar after the prospect of a rate rise this year receded.
The recent rise in the price of oil, the further weakness of the pound against the Euro, along with a resilient economy (albeit growing at a slower pace – see below), are all likely to encourage further rises in consumer prices.
UK economic growth edged slightly higher in the three months to June, as a stronger service sector offset weaker manufacturing and construction. The Office for National Statistics (ONS) said the economy expanded by 0.3% in the quarter, up from 0.2% in the previous three months. However, the ONS added there had been a notable slowdown from last year – in the last three months of 2016 Gross Domestic Product (GDP) grew by 0.7%.
Film production in the UK, plus box-office receipts from cinemas, was one of the best performing parts of the economy during the April-June period, whilst the construction sector weakened.
Growth has accelerated significantly in Continental Europe as well as many emerging markets, with Brexit primarily holding the UK back as uncertainty continues – some economists have suggested UK growth could be as high as 2.5% without the Brexit factor.
The average price of a home in the UK went up by nearly £2,000 to £223,000 in June – the annual rate of increase is running at 4.9%, down from 5% in May, while prices rose 0.8% between May and June.
The ONS figures show a wide variation in price movements across the UK – in June the average price of a London home fell £3,000 to £482,000, while a house in the North East of England gained £2,000 to £130,000.
The Royal Institute of Chartered Surveyors (RICS) said its members believed prices had stood still on average in recent months and that a slowdown was spreading from London to other parts of the South of England. This is tempered however by the continued lack of supply, which shows little sign of address in the short term.
A subject which, understandably, is receiving a significant amount of air time and for which negotiations are at an early stage. The uncertainty this is creating (highlighted above) is likely to continue for some time. It appears that EU negotiators are aiming to secure citizens’ rights and a financial settlement before enabling trade talks to progress, things which are likely to exacerbate uncertainty in the short term.