It’s been a mixed week for the markets.
This morning saw the announcement of new GDP figures which showed the UK economy had contracted by 0.2% in the last quarter, pushing the UK ever closer to officially being in recession. It’s worth noting that the Bank of England already believes that we are now currently in one.
The UK remains in a holding pattern whilst we await the Autumn Statement on Thursday next week. Speculation is currently rife on what measures will be announced however the Treasury remains tight-lipped.
In the US we saw congressional elections producing near-on stalemate results. The Republicans gained a bit, the Democrats lost a bit, but a status-quo of political paralysis looks set to remain regardless of who formally wins, given that neither side looks set to have a solid working majority.
The news in the US got a bit brighter though towards the end of the week when figures were released showing a decrease in the inflation rate.
The effects of all the above on the currency markets have been interesting. Over the course of the week, Sterling has gained quite a few points against the Dollar, yet stayed at roughly the same position against the Euro.
All eyes are now on Jeremy Hunt because as mentioned above, the UK is holding its breath in preparation for the Autumn Statement next Thursday at lunchtime. By next week we’ll also hopefully see the final US election results which will help to give the markets a better understanding of the US landscape for the next two years.