“Britain is not immune to ups and downs in the world economy but 3Q growth figures perhaps demonstrate, subject to the usual health warnings, that preliminary GDP data can be ropey, a good degree of insulation,” BAML added.
Ian Forrest, investment research analyst at The Share Centre emphasised the importance of looking at economic growth numbers on a relative basis and zeroing in on the exact drivers or the reading.
“The UK economy looks like it has been losing momentum, hindered by China’s downturn, a construction slump and ailing manufacturers,” he said. “However, recent figures including retail sales figures, have beat expectations. Therefore, despite the market’s disappointment this morning, investors should acknowledge that this level of growth is still relatively good and the weakness appears to be mainly in manufacturing which is not unexpected.”
Whether the truth of the matter is at the optimistic or bearish end of the opinion scale, investors will be looking a little closer at their UK weighting after this morning.
