Our latest view on the outlook for the UK economy and commercial property market.
The UK has now entered the next phase of negotiations, following the official departure from the European Union on January 31st 2020. Whilst uncertainty around the timing of Brexit has lifted, there remains a high level of uncertainty clouding the economic outlook beyond 2020. The transition period expires in December 2020 which means the cliff-edge possibility of a ‘no-deal’ type scenario (reverting to World Trade Organization rules) remains a risk at the end of the year. This is likely to curb any significant improvement in business confidence.
UK GDP growth flatlined in Q4 2019, albeit preliminary figures indicate annual GDP growth for 2019 was 1.4%. Whilst postelection data has been limited, there have been early signs of a pick-up in optimism following the landslide election victory by Boris Johnson. The ‘Boris Bounce’ is most evident among consumers, with the GfK consumer confidence index jumping to -9 in January 2020, up 2 percentage points from December and marking the second consecutive month of improvements. Sentiment has also picked up amongst businesses.