The Monday Note - 1 October 2018

• The FTSE 100 closed at 7,510.2 on Friday, ending the month with a 1% gain, but down 1.6% over the quarter as the Brexit uncertainty continues. The 10-year Gilt yield rose to 1.58%. 
• China’s manufacturing PMI index dropped to 50.8 in September, down from 51.3 in August, reflecting a general slowdown and the trade confrontation with the US. A reading of over 50 for the index suggests growth. 
• The ONS lowered the annual growth rate for UK GDP in Q2 to 1.2%, from 1.3% previously, due to a contraction in business investment. 
• Amazon has opened a bricks-and-mortar store in New York City. The goods on the shelves in the cashless shop are chosen by algorithms.

Chief Economist comments: 

As the politicians struggle to solve the Brexit puzzle, it is unsurprising that business investment has taken a hit in the UK. How can anyone plan for the future when the situation changes on a near daily basis? One point to note is that Chequers remains the only plan anyone has put forward for Brexit, while enthusiasm for a ‘no deal’ scenario is marginal. If an alternative is not proposed, and no one wants to chance the cliff edge, then the Prime Minister’s plan could win by default.