Will it? Won’t it? On Friday we learned that, after delivering a strong first quarter performance, UK GDP contracted by 0.2% in the three months to June. This marks the first outright decline in economic activity since 2012 and puts the UK uncomfortably close to ‘technical recession’ territory just as global growth is faltering.Continue reading
The BoE’s latest Inflation Report downgraded its growth forecasts but continues to predict “gradual” UK rate hikes assuming a smooth Brexit. In contrast, the Federal Reserve lowered the funds rate 0.25% to 2.25%, its first reduction since 2008. US president Trump’s announcement of a 10% tariff increase on the remaining $300bn of Chinese imports and China’s retaliation adds to global trade concerns, increasing the pressure for further Fed moves soon.