“Both of these factors are likely to weigh on consumption, a major driver of the UK’s growth in recent years.
“Business investment, as measured by gross fixed capital formation, remains subdued and our central case is that there is unlikely to be a full recovery as long as uncertainty relating to the UK’s secession from the EU remains elevated.”
This downbeat business sentiment was mildly offset by persistent sterling weakness, which is helping UK businesses to continue to look competitive.
However, the improving economic data globally during Q1 is a positive takeaway for investors.
“Volatility was low as improving economic data showed the global recovery broadening,” it added.
“Positive political developments in Europe also helped, despite ongoing political uncertainty on both sides of the Atlantic.
“We believe it is encouraging that the market’s progress was built on more than the prospect of fiscal expansion”.
