Almost every analyst, when pressed, admits at least some degree of surprise, at the post-EU referendum performance of the markets and the wider UK economy. The consensus, back in June 2016, was that the UK would be in the midst of a downturn, or even a recession.
Where current division of opinion exists between analysts, it focuses on the UK’s forecast GDP growth in the immediate and mid-term, and the performance of sterling on the currency markets.
For economists and market analysts, what’s not to like?
The FTSE is trading at record levels. In early February 2017 it reached its 11th record close in succession – 2017 has started in a spectacularly positive fashion.
Added to the performance of the market, the UK is expected to become the strongest performing economy in the G7 this year.
New figures from the Halifax show that sales of houses to first time buyers have reached a 10-year high. The housing market, outside London at least, is still booming.
Reports of retail sales from the UK’s biggest companies have been almost exclusively positive – it was a bumper Christmas for companies such as Marks and Spencer and Tesco.
Inward investment doesn’t seem to have been too badly affected by the Brexit vote. Google, Facebook and Snapchat have all recently announced new job creation in the UK.
The Bank of England has downgraded the risk of Brexit as the key risk for medium-term financial stability.
With Donald Trump’s inauguration, a week today, the prospect of a new tax-reduction stimulus in the US is likely to trigger GDP growth not seen since bad days of 2008 and the financial crash.
Despite a cautious start to 2016, after a record year for Mergers and Acquisitions (M&As) in 2015, the number and value of UK M&As reached a record in October last year. This trend could continue in the first quarter of 2017.
All things considered, the analysts might say, things are looking distinctly rosy for the City of London, the wider UK economy, and indeed the global economy.