The Monday Note - 1 April 2019

• The FTSE 100 rose by nearly 72 points last week to close at 7,279.2 on Friday. The ten year Gilt yield stood at 1.01%. 
• Inflation in the US eased to 1.8% in January, which was down from 2.0% in December, and below the consensus forecast figure of 1.9%. 
• According to ONS figures, the UK saw a net inflow of foreign investment of £35.8 billion in Q4 2018, up from £18.0 bn in Q3. However, the UK’s trade deficit widened in Q4, despite improved services exports. 
• Weekend press reports suggested that the government will this week put the EU Withdrawal Agreement before Parliament for a fourth vote. There was also speculation about a general election. 

Chief Economist comments: 

The latest trade figures provide two reasons for a reality check on Brexit. Firstly, while many MPs are now talking about keeping the UK in the EU customs union, which covers trade in goods, the growth area for Britain is services exports. Trade in services is covered by the EU’s single market. Are the politicians focussing on the wrong trade agreement? Second, note that despite the chaotic political news, foreign money flowed into the UK faster than domestic money left. Overseas investors are looking past the Brexit uncertainty. So should we.