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Investment Markets

What the Autumn Statement meant for the investment markets

Given the already known Brexit related economic impacts and government comments about resetting economic policy, the Autumn Statement did not cause any significant shocks for the investment markets.

The lower economic growth forecasts from the Office for Budget Responsibility were largely in line with market forecasts and were driven by the anticipated impact of Brexit related uncertainty on business investment and from higher inflation reducing consumer spending.

The resulting worsening in deficit reduction forecasts has led the chancellor to delay balancing the books rather than accelerate austerity measures.

There is a higher than normal level of uncertainty over forecasts given the lack of clarity over the results of the Brexit negotiations, but some room was created to increase support for the economy with a focus on investing to support long term productivity growth through areas such as infrastructure spending.

The markets have coped well so far with the unexpected political events of 2016 and UK investors have benefitted from the impact of the post-Brexit decline in sterling which has helped many UK listed companies and also boosted the value of overseas holdings.