020 7898 0500The highly anticipated first quarter Gross Domestic Product (GDP) was released on Friday. The GDP numbers are released three times: preliminary, revised and final, in consecutive months. The headline figure missed expectations, which was disappointing as it was already forecasted to decline from the fourth quarter of 2016.
The economy grew by just 0.3%, the slowest growth rate in a year. Economists were forecasting the number to decline as inflation and uncertainty has put the reins on consumer spending. Question marks remain regarding the potential of a mild form of stagflation, as inflation is expected to push higher. If growth continues to slow amidst the current landscape it is plausible that this could put a strain on labour markets.
<Charles, we want to include a EUR/GBP live rates graph here, with the caption: With Brexit uncertainty and the French elections, there has been significant volatility in the EUR/GBP pair despite the long weekend.>
However, despite the disappointing news, we saw sterling initially supported but this support slipped away over the bank holiday weekend. Meanwhile, on the political front it was reported that the Conservative lead over Labour has slipped by seven points. YouGov reported that in a recent poll, support for the Conservatives has fallen from 48 to 45 while Labour increased their support by four points to 29.
Looking to the week ahead, we have the purchasing managers indexes (PMI) for the manufacturing, construction and service sectors which will give further insight into how serious the slowdown in the UK economy is.
