Ana Boata, European economist at Euler Hermes, the world’s largest trade credit insurer, comments on the estimation for UK Q1 GDP:
“The transitional Brexit deal between the UK and EU gives relief to businesses for a smoother EU exit, not expected before 2021, and supports investment in the short-term. Stronger sterling supports firms’ pricing power in a still growing external environment while it lowers pressures on input prices. However, the pick-up in wage growth, rising oil prices and higher financing costs, could hit corporate margins, already at their lowest level since 2014."
“While we see the softness of Q1 GDP as mainly due to temporary effects and the delays in the construction sector due to unusually cold weather in Q1, we forecast the UK economy will grow by only +1.5 per cent this year. This increase will be the slowest expansion rate in the G7 in 2018, with Germany (+2.5 per cent), France (+2.1 per cent) and the US (+2.3 per cent) all forecast to achieve higher GDP growth.”
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