He says: “No recession on the pedantic definition of two consecutive quarters of falling GDP, but a calamitous performance nonetheless. The UK still is the only G7 country in which GDP has not exceeded its pre-Covid peak yet.”
Venetis noted that at the most recent meeting of the Bank of England’s Monetary Policy (MPC), the central bank now expects the economic downturn in the UK to be “less severe” than its forecast of three months earlier.
Therefore, Venetis' view is that right now the risk is that the market and central bank are being too pessimistic about the outlook for UK growth.
So with the data painting a somewhat confusing picture (added to by the FTSE 100 hitting a record high), it is difficult now to tell where the "animal spirits" which govern so many investment and economic decisions will end up, but advisers may start to feel the conversations with clients around UK exposure are about to get a bit more cheerful.
David Thorpe is investment editor at FTAdviser
