INVESTMENT REVIEW - SLOWING GROWTH WEIGHS ON MARKETS
April brought further gains in global stock markets,
despite evidence of slowing growth in the UK, China and Europe,
prompting bond yields to resume their downward
trajectory.
UK
The Chancellor George Osborne was handed some positive news for
a change as first quarter GDP came in at 0.3%, beating expectation
but failing to excite equity markets. The figures mean that GDP is
back to the level it was at the start of 2007, but remains around
2.5% below its prior peak level. More encouraging was the 0.6% rise
in services output, which accounts for around 70% of UK GDP. The
continued decline in real wages has weighed heavily on consumption
and remains a key piece in the UK's 'productivity
puzzle' - the fact that output has fallen, even though
employment growth has remained relatively robust. Firms have
continued to hire at low wages, taking on more (but not necessarily
more productive) workers than they would
