NBWN’s longstanding treasurer, Kay Burt presented her annual market overview for January 2018.  You can read the full report here but to summarise, Kay provided a brief overview of 2017 and a look ahead to what we can expect from the financial markets in 2018.  Despite a turbulent year for worldwide politics and negative media coverage, the outlook for equities is a good one and global economic growth in 2018 is predicted to be around 3.7% compared to 3.6% in 2017.

 

Looking specifically at the UK, the economy has slowed somewhat from its long recovery from the credit crisis ten years ago but economic growth is forecast to be at least 1.5% in 2018 (although this lags behind most of the G7 apart from Italy and Japan).  The uncertainty around Brexit EU trade will be realised in due course but in the meantime, on the positive side, the import inflation uptick we saw in 2017 caused by the 15% sterling devaluation in 2016 has started to reverse and there are signs that wages should increase a little in 2018.  Unemployment is very low at 4.3%.  The main driver for economic growth is the consumer, driving 70% of economic growth – spending on cinema, theatre, pubs and restaurants in 2017 was buoyant (up 12.5%) and is always a good sign of consumer confidence.  However, any further rise in interest rates will hamper those with high household debt.

 

Manufacturers, who make up 10% of the economy and exporters benefitted from the weaker sterling in 2017 with exports up by 14%.  Business investment continues despite the Brexit result and NBWN members will be pleased to hear that UK smaller companies were up 27% year on year.

 

You can read more about the state of the commercial property market, house prices and changes in tax legislation from April 2018 in the full report, which also provides a market overview of the US, Asia and Europe markets as well as a more detailed forecast for the UK.