The service sector seems to have helped UK GDP avoid a triple dip recession. GDP rose 0.3% quarter on quarter which was higher than forecasters expected (0.1%) Over the longer term however the GDP outlook remains challenging.

  • It’s certainly nice to avoid a triple dip recession although the difference between “no growth” and “low growth” is fairly trivial in reality.
  • Consumption has been weighed down by deleveraging as households continue to pay down mortgage debt and boost savings in preference to spending.
  • Weak spending power, as inflation has exceeded wage growth, provides a further headwind for the consumer.
  • Large gains in employment last year have helped to offset the weakness in wage growth.
  • The weaker pound has failed to rejuvenate the export market because the UK’s trading partners are suffering a prolonged slump.
  • Sterling’s weakness has also weighed on discretionary consumption because it has increased the price of food and fuel.
  • Unlike the UK economy, the UK equity market has a more virtuous source of revenues, particularly from the US and emerging markets.
  • We see the very accommodative monetary environment as continuing and remaining supportive for UK-traded investments.

Full article – Market Perspective – UK GDP not so Deeply Dippy – 25 April 2013 (PDF)

Important Notes

The information contained in this report represents an impartial assessment of the value or prospects of the subject matter. Graphs, performance data etc are as at the close of business on the day preceding the date of the note. The information contained in this report has been taken from sources disclosed in this presentation and is believed to be reliable and accurate but, without further investigation, cannot be warranted as to accuracy or completeness. The opinions expressed in this document are not the views held throughout Brewin Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd. accepts liability for any direct or consequential loss arising from the use of this document or its contents. We or a connected person may have positions in, or options on, the securities mentioned herein or may buy, sell or offer to make a purchase or sale of such securities from time to time. In addition, we reserve the right to act as principal or agent with regard to the sale or purchase of any security mentioned in this document. For further information, please refer to our conflicts policy, which is available on request or can be accessed via our website at The value of your investment or any income from it may fall and you may get back less than you invested. Past performance is not a guide to future performance. If you are in any doubt concerning the suitability of these investments for your portfolio you should seek the advice of a qualified investment adviser. Brewin Dolphin Ltd, a member of the London Stock Exchange, authorised and regulated by the Financial Services Authority.
Registered office: 12 Smithfield Street London EC1A 9BD. Registered in England and Wales no 2135876.