UK Unemployment Falls

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  • May 20, 2019

Last week the Office for National Statistics (ONS) released UK labour market data for the first quarter of 2019. The figures showed that employment increased over the quarter to March, by 99,000, taking the total in employment to 32.7m. Furthermore, the growth in jobs pushed the unemployment rate down further, to 3.8%, a decrease of 0.2% on the prior quarter. Signs of tightness in the labour market continues to be seen, with vacancies remaining at elevated levels and anecdotal evidence in some industries of companies struggling to find enough staff. As a result, wages are growing ahead of inflation, increasing at 3.2% year on year against CPI inflation of 1.9%. This is expected to continue over the coming months.

German Economy Rebounds

The German economy grew by 0.4% in the first quarter of the year, rebounding from a weak finish to 2018. The EU’s largest economy avoided a technical recession last year although experienced flat growth in the final quarter. While there has been a recovery in the domestic economy, observers are concerned that the potential disruption in global trade may impact on Germany, which is deeply reliant on international trade for growth. Nevertheless, Germany needs to re-orientate its economy towards domestic consumption as political pressure on its excessive current account surplus intensifies. The increasing construction and manufacturing investment seen as well as planned tax cuts and social benefits being implemented later this year should improve the balance.

Indian Elections

India flag for elections

India, the world’s largest democracy is currently holding elections, the results of which are due to be announced this Thursday. Investors in India will be closely watching the progress and will be hopeful for the re-election of the current Prime Minister, Narendra Modi, who has been seen as a positive reformist for business and the economy. Modi is currently expected to retain his position, and a loss would likely be a negative surprise for markets. India has become an increasingly important component of the world economy and is expected to overtake the UK as the 5th largest economy with GDP growth in excess of 7% in 2019.

Market Data

Index Open Close Change % Change
FTSE 100 7203 7348 145 2.01%
S&P 500 2881 2859 -22 -0.76%
Dax 12059 12238 179 1.48%
Cac 40 5327 5438 111 2.08%
Nikkei 225 21344 21250 -94 -0.44%
UK 10 Year Gilt Yield 1.13 1.04 -0.09 -7.96%

Posted By Will Dickson

Chief Investment Officer Will Dickson is a Chartered Wealth Manager as part of the Chartered Institute of Securities and Investment (CISI) qualification scheme. This recognition was obtained following an MSc in Finance and Investment from the University of Exeter, and an Accounting and Finance BSc from the University of Bath. Will’s exceptional talent is recognised by CityWire’s Wealth Manager, having been named as one of the UK’s Top 30 investment managers under the age of thirty for the last three years. Will manages and oversees P1’s range of investment portfolios. Working with the Investment Team, Will shapes the investment policy and fund selection for our Passive, Hybrid and Ethical and Sustainable portfolios. In conjunction with managing the fund portfolios, he oversees and our AIM Inheritance Tax and Tier 1 Investment Visa equity portfolios. Will has joint written articles with P1’s Head of Research, Dr Rayer. Their article “Hypothesis: Risk, like Mass and Energy, can neither be created nor destroyed” featured in the CISI’s The Review of Financial Markets. In addition to contributing to articles with Dr Rayer, Will often delivers P1 CISI Endorsed lectures to Independent Financial Advisers. You can see Will’s take on weekly investment news here.