Yael Selfin, Head of Macroeconomics at KPMG in the UK, comments on today’s release of Q4 GDP figures from the ONS:
“The preliminary figures for Q4 GDP show the UK economy grew in line with our expectations of 2% in 2016, with another relatively strong quarter driven by business and leisure services.
“The overall outlook for the world economy is positive. It is currently in much better health compared to just a few years ago. Commodity prices are on the rise, bolstering prospects for commodity exporting economies, while government spending in a number of G7 economies is set to pick up. Inflation is also increasing, and bond yields have been rising to reflect this, although most central banks are expected to adopt a relatively conciliatory stance, with monetary policy remaining relatively loose overall this year.
“The medium term outlook includes a period of significant uncertainty. The likelihood of more volatile markets (particularly in FX), and potential surprises that could have major impact on the economic and business environment, remains relatively high. This is already captured by uncertainties around the shape of Brexit in the UK, Donald Trump’s policy direction in the US, and the results of the various European elections this year. However, the voter dissatisfaction and anti-globalisation mood we inherited from last year could mean not just further impacts on trade but also other unexpected surprises.”
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