Janet Mui: weekly economic update 18 October
The announcement of a Brexit deal – yet to be passed by the UK Parliament – has removed some near-term uncertainty. But the longer-term picture remains unclear.
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- The announcement on Thursday of a deal between the UK and EU caused a sharp rally in sterling.
- This was partly reversed when the DUP declined to support the deal. Getting the deal through Parliament, which meets tomorrow (19 October), looks likely to prove difficult.
- The short-term economic effect of a deal is likely to be positive, as it will remove some uncertainty.
- But a deal would still leave much negotiation to take place. We believe that in the longer-term, Brexit is likely to limit freedom of movement and this could prove a potential brake to future growth.
- In other news this week, China's third quarter growth figures – the lowest since the 1990s – were greeted with disappointment. They are likely to add further pressure to Chinese authorities to increase stimulus measures.
This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.
This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.
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