Financial markets got off to a tumultuous start to the year, but the economy has begun 2016 on a slightly stronger footing. The Markit/CIPS surveys point to quarterly GDP growth of around 0.6%, a slight pick-up on recent rates. And consumer confidence rose in January despite the equity price falls. Meanwhile, most of the recent market movements – such as the drop in oil prices and the pound – should be helpful for the UK economy. Admittedly, the draft EU deal has increased the chances of an early EU referendum, which could mean a rise in uncertainty in the near term. But we still think that the economy should weather this fairly well.
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