The composition of GDP growth in the fourth quarter of 2015 highlighted the lack of progress in rebalancing the economy. And we think the near-term prospects aren’t much better. But we do believe the potential for more balanced growth further out is greater.
The high level of the pound and subdued trading-partner prospects means that manufacturing is unlikely to provide much support to the services-led recovery any time soon. That said, the recent fall in the pound should provide some relief for manufacturers and, along with an acceleration in the global expansion, allow net trade to finally contribute positively to growth beyond this year.
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