Car registrations were at a 12 year high in January, but economists warned that a slowdown is due. There were 174,564 new cars in January, which was the fastest start to any year since 2005. It is also 2.9% higher than 2016.
The tax burden for the UK is expected to rise to the highest level in 30 years the Institute of Fiscal Studies has said. This will be due to Philip Hammond’s pledge to reduce public borrowing to under 2% of national income by 2020 – 2021 and then to 0% as quickly as possible after the 2020 election. As a result tax revenues will be pushed above 37% of national income during 2019 – 2020.
The European Commission has revised its growth forecast for the UK from 1% to 1.5% for 2017. This seems to suggest that the impact of Brexit will not be as severe as initially feared.
Unemployment figures for Q4 2016 fell by 7,000 and the overall figure is now 4.8%, the lowest since 2005. Women in employment is now at a record high of 70%. Regional differences have emerged with employment levels falling in Scotland, NE & NW & East England. Growth was recorded in SE England & Northern Ireland. Wage growth slowed however to 2.6% which was below forecast.
HSBC saw its value wiped out by €10bn after it reported an 82% drop in annual net profits on 21 February. Profits plunged from $13.5bn to $2.5bn. HSBC is now looking to increase its asset management acquisitions after focussing on disposals for the last decade.
According to the Office of Budget Responsibility, the government is currently on track to borrow less than forecast for the 2016-2017 financial year. Between April 2016 and January 2017, borrowing was 22% less when compared to the same period the year before.
The UK economy grew at 0.7% for Q4 2016 which seems to confirm that Brexit had barely any noticeable impact on the economy for H2 2016. Households spent 5% more than in Q4 2015. However, the consumption and income growth gap has started to show with spending up 1.3% compared to income which grew by just 0.1%. Business Investment decreased 0.9% when compared to the same period in 2015.