Download our April forecast to find out more about our latest predictions for the economic outlook. As with any prediction, these are based on current circumstances and are likely to change.
The story behind the numbers
The European timeline is dominated by political uncertainties in 2017, with French and German General Elections occurring in the next 6 months and Brexit negotiations which have just started. Indeed, as widely expected by the markets, the UK Government finally triggered Article 50 on 29th March to exit the European Union. Brexit risks will remain at the forefront in the UK over the next two years as negotiations progress.
The Bank of England (BoE) opted to keep rates steady at 0.25% in the March UK Monetary Policy Committee (MPC) though presenting a surprise shift to a more hawkish tone, with one member voting in favour of a rate hike representing the first dissent since August 2016. The inflation report revealed just after the MPC meeting further added fuel to the fire, with inflation rising to 2.3% in February standing above the BoE target of 2%. Governor Carney reiterated the idea that monetary policies will be used to respond to changes in the UK economic outlook in either direction. GBP rates are currently trading at 1-month low yields with 2 year swap rates dropping by 7 basis points at the end of March to fall below the 60 basis points mark.
Data produced 4th April 2017