Janet Mui: weekly economic update 12 April

Brexit' delay protracts uncertainty for the UK. In Europe and the US, interest rate policy remains



Janet Mui
Global Economist, Cazenove Capital

Brexit limbo

Following talks between the EU officials and Theresa May on 10 April Brexit has been granted a "flexible extension" up until 31 October. While the delay removes the immediate danger of a cliff edge Brexit, it adds more frustration by prolonging uncertainty which is detrimental to business confidence and investment. That said, the UK economy should remain relatively resilient thanks to a tight labour market.

European Central Bank meeting

The European Central Bank retained its forward guidance that the key policy rates will stay unchanged through year-end. Overall, we think the ECB will remain accommodative but a rate cut is not on the table unless economic data gets much worse.

Minutes from the Federal Reserve

The minutes of the latest Federal Open Market Committee meeting suggests the Fed will hold back from interest rate changes. We think that the bar for any rate increase is high and expect rates to remain on hold for the rest of the year - unless growth and inflation rise strongly.

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Janet Mui
Global Economist, Cazenove Capital


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