26/06/2018
Pound stutters on weak economic data
Weaker than expected readings on the economy sent sterling tumbling earlier in the month, before the Bank of England gave the pound a shot in the arm after indicating it could raise interest rates from as early as August. Having opted to leave the cost of borrowing unchanged this month, Threadneedle Street still suggests the economy is stronger than official data appear to suggest. The manufacturing sector provided the worst of the bad news for the economy over the past month, putting pressure on the pound, after figures showed the worst month for output in five years. Despite rising in recent days, the pound is still worth more than 10% less now than on the eve of the Brexit vote.
The FTSE 100 tumbled over the course of last month amid mounting fears over a global trade war triggered by Donald Trump’s trade tariffs. The president refused to exempt the European Union (including the UK), Canada and Mexico from steel and aluminium tariffs on imports from outside the US, while threatening $200bn (£151m) of additional tariffs on Chinese imports. The news rocked global stock markets as investors grow increasingly concerned over the actions, with the FTSE 100 losing more than 100 points in the past few weeks.
If your thinking of buying assets for your business this year and with the possible threat of rates increasing as early as August now maybe the right time to invest!!
