UK Chancellor of the Exchequer Philip Hammond delivered his first ‘Autumn statement’ on Budget policy since taking office in July, following the Brexit vote. Hammond said UK economic growth is expected to slow significantly in the coming year and that the country must be prepared for fiscal imbalances by 2020 due to high uncertainty and weaker outlook.

In 2017, the Office for Budget Responsibility forecasts growth to slow from 2.2 per cent predicted in March to 1.4 per cent. The Chancellor said the expected sharp decline was attributed to lower investment and weaker consumer demand, driven by greater uncertainty and by higher inflation resulting from sterling’s depreciation.

Meanwhile, a survey released by IHS Markit showed that Germany’s private sector slowed marginally in November after increasing to a 10-month high in October.

The composite index fell from 55.1 in October to 54.9 in November. A reading over 50 indicates growth in the sector. The November reading was slightly lower than that forecast in the Reuter’s poll of 55 but still above 50. The survey indexes show­ed that the services PMI climb­ed to a six-month high of 55.0 in November from 54.2 in October, though it was expected to fall to 54.0. Factory PMI fell to 54.4 from a 33-month high of 55.0 in October. Economists had projected this to fall to 54.8.

Finally, in the US, a report published by the National Association of Realtors showed that existing home sales rose unexpectedly in October with sales being at their highest rate in nearly a decade. Existing home sales rose by two per cent to an annual rate of 5.60 million in October after an increase of 3.6 per cent to a revised 5.49 million in September. Economists had expected a decline of 0.9 per cent to a rate of 5.42 million in October from 5.47 million in the previous month.

Following this unexpected rise, existing home sales increased to their highest level after reaching 5.79 million in February 2007.

This report was compiled by Bank of Valletta plc for general information purposes only.

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