What The Bleep?

UK economy flatlined in October

Image source:

What's going on?

Data out on Tuesday showed the UK economy flatlined in October, with annual growth at its slowest pace in nearly seven years. Cmon, dont you quit on us!

What does this mean?

The UKs services and manufacturing sectors grew in October, but the boost was offset by a big drop in construction activity. Building firms are blaming thatominous symptom on customers who have delayed projects amid ongoing Brexit uncertainty if not canceled them altogether.

But Brexit-related trauma isnt the only diagnosis. British voters are set to head to the polls on Thursday, adding to political ups and downs thatve weighed heavy on the economy this year. Cap that off with a weakening, trade war-hit global economy, and its perhaps little wonder the UK is on course for just over 1% growth this year its worst performance since the financial crisis a decade ago.

Why should I care?

For markets: 50ccs of Brexit, stat!
If the polls are to be believed, Britains election could give a majority to the countrys pro-Brexit Conservative party and give them the foothold they need to leave the European Union early next year. And that means policymakers, if all goes to plan, will be able to focus on boosting growth again. That could work out nicely for UK stocks, especially since theyre trading at the biggest discount to their global counterparts in nearly a decade.

The bigger picture: Germanys stabilizing.
Britains not the only major economy dealing with weak growth. Germany the worlds fourth-largest economy, just ahead of the UK narrowly avoided a recession this year. But a survey out on Tuesday showed economic sentiment improved far more than forecast after an unexpected boost in October exports. Thats raising hopes for a rebound in Europes biggest economy, and could encourage investors whove been pulling money out of the European stock market all year to jump back in.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over one million Finimizers

Read next

Written In The Stars

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.