The Monday note - 10 September 2018

• The FTSE 100 dropped 2.1%, or 156.6 points, last week, closing at 7,275.9 on Friday. Investors have been struggling to gauge the impact of global trade tensions. The ten year gilt yield rose to 1.46%. 
• UK GDP expanded by an impressive 0.6% in the three months to July, thanks to strong figures for the retail and professional services sectors. This was a marked improvement on the 0.4% figure for June. 
• The latest UK manufacturing PMI index read at 52.8 in August, which was below the consensus forecast of 53.8 – a reading of over 50 points to growth. 
• Amazon became the second US company to achieve a stock market value of over $1 trillion. The New York Times estimates that 49 cents of every e-commerce dollar spent in the US goes to Amazon. 

Chief Economist comments: 

The economic news for the UK is not matching the perception that the country should be in a hole due to Brexit uncertainty. Interestingly, there have been signs of a willingness to do a deal emerging from the continent in the last couple of weeks. Some in Brussels might be concerned that if Theresa May leaves Downing Street the next incumbent could be harder to deal with. If we are heading towards a deal with the EU in November, an expanding economy and weak pound could make Britain a preferred target for overseas capital in the final months of this year.