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Encouraging signs beneath Q1 weakness

Last week ended with a general sense of relative pessimism, following the lack of the expected upgrade to Q1’s GDP figure and the news that net trade was a big drag on the economy. But we are not too worried by either of these developments. Significant revisions only tend to happen after a while. And the big picture is that net trade has been broadly neutral for the economy recently.

More encouragingly, the recovery in business investment seems to be picking up speed again. And the boost to household spending from lower energy prices is yet to come fully through. Accordingly, we remain optimistic about the outlook for the recovery.


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