This Thursday and Friday, 26th and 27th January, will see the release of the two sets of crucial economic figures: the initial estimates of the UK and US Q4 GDP.
The UK Q4 GDP (YoY and QoQ) will be released at 09:30 GMT on Thursday, while the US Q4 GDP (QoQ annualized) will be released at 13:30 GMT on Friday.
The quarter-on-quarter Q1 to Q3 UK GDP final readings were 0.4%, 0.7% and 0.6%, showing a modest fall post the Brexit vote. The year-on-year final GDP readings were 2%, 2.1% and 2.2%, showing a moderate uptrend.
The market expectations on the UK Q4 GDP show a further decline of 0.5% (QoQ) and 2.1% (YoY) respectively, as a result of Brexit uncertainty.
Continued Brexit uncertainty over Britain’s economic prospects has influenced the business climate. Some corporations have moved or are moving their headquarters, and are cutting the number of their employees based in the UK.
The UK Supreme Court announced yesterday that it will require the parliament’s approval to trigger Article 50 to leave the EU. It will take an extended period to identify when Brexit will be put into practice, and as a whole, whether Brexit will bring more benefits or adversity to the UK. If the Q4 UK GDP figure is better-than-expected, it will be more favourable for the UK during the negotiation process with the EU.
Despite the market consensus of 2.1% for the US Q4 GDP (QoQ). The quarter-on-quarter Q1 to Q3 US GDP final readings were 1.1%, 1.4% and 3.5%, showing a robust economic recovery.
UK Prime Minister Theresa May is set to visit President Trump on Friday 27th January in Washington – she will be the first foreign leader to visit the new US president.
The discussion will, most likely, be comprised of the improvements in the trade and financial relations between the two countries, cuts of bilateral trade taxes, the North Atlantic Treaty Organization (NATO) and Syria.
Theresa May expressed in a recent interview with the BBC that Trump would like to build a strong relationship with the UK.
As it is likely that the UK will no longer be a member of the EU, actively seeking new alliances is crucial.