Prolonged periods of low commodity prices and slowing growth in emerging economies continue to raise concerns of a global economic slowdown. Elsewhere, geopolitical tensions in the Middle East and Eurozone have heightened. US growth forecasts have been downgraded, and the global economic risks remain predominantly on the downside. On 23rd June 2016 the UK voted to leave the European Union (EU). Following the news, the country is expected to remain in a prolonged period of uncertainty until new agreements are ratified. As a consequence, financial markets are likely to be volatile and the pound is expected to fluctuate and may depreciate further.

Despite heightened economic and political uncertainty, the outlook for the UK economy remains reasonable, whilst less positive than previously. The rate of employment increased to 74.2%, regular earnings were up 2.6% in the year to April and the rate of inflation fell to 0.3%. On the downside, the UK’s trade deficit and public sector debt continue to rise. A weaker pound will provide a much needed boost to UK exports going forward, however.

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