Data and surveys released since the start of September pointing to a more subtle initial adjustment to the Brexit vote.
Those of you out and about across the UK will be forgiven if you thought you may have taken the wrong flight back from holiday, with the current weather more like LA than usual for a British autumn.
There are signs that this blissful Indian summer may have also extended to the UK economy, with data and surveys released since the start of September pointing to a more subtle initial adjustment to the Brexit vote, after relatively gloomy data earlier in the summer.
Overall, the picture looks somewhat more positive for the second half of this year. We now expect consumers to adjust their spending decisions more gradually, and for businesses to be less cautious on investment, bolstered by positive short term export performance thanks to the lower pound.
We have revised our forecasts upwards as a result of the latest data, and our main scenario for the UK economy is now for GDP to grow by 1.7% this year and by 0.8% next year (up from 1.5% and 0.5% respectively).
These are still early days, and given the exceptional uncertainty around the future relations between the UK and many of its partners, we could see significant shifts in data and sentiment from month to month. We are also still waiting for the Government to reveal more about its fiscal policy plans and about its infrastructure and regional strategies. We continue to advise our clients to use a number of potential scenarios when planning for both the short and long term.
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