Thu, 23rd Feb 2017
The FTSE 100 got off to a weak start this morning, as Germany beat the UK, and claimed the crown of the fastest growing major economy during 2016. According to official data released this morning, German GDP rose by 1.9 percent last year, while over the same time period the UK’s GDP grew by 1.8 percent.
The German economy successfully quadrupled its growth rate, up to 0.4 percent, during the fourth quarter of 2016, according to a report by the Federal Statistics Office. The growth was caused by a combination of increased private consumption, construction growth, and higher state spending.
Analyst Claus Vistesen of Pantheon Macroeconomis said that the report showed that the German Economy has comfortably shrugged off some mid-year weakness, and highlighted the fact that there is likely to be even more growth in Q1.
Brexit has had an impact on the UK already, and the ECB’s chief economist is concerned that there could be more future impact on bilateral trade, and that things could turn nasty “quite quickly”. He noted that this is an important lesson from history, and that while he remains optimistic, he cautioned that we should not be blindly optimistic.
The UK’s CBI retail sales showed that the sales balance had risen to +9 in February, an improvement over the -8 for January, and beating consensus forecasts for +4. The recovery, however, is not enough for some, who highlight that in previous years the CBI was averaging +18.