While the economy managed a stronger-than-expected expansion in Q1, this might be as good as it gets this year. The economic news for Q2 so far has been undeniably weak. And if there is a further Brexit delay or a no deal – both of which seem more likely following Theresa May’s resignation – then we would expect GDP growth, interest rates, gilt yields and the pound to all stay lower for longer. Admittedly, some comfort can be drawn from the fact that the rest of the world has not been firing on all cylinders either. Indeed, the UK economy does not appear to have performed much worse than the euro-zone in Q2. But the weak global backdrop is just one more headwind for the UK.
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