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The challenges being raised in 2017 include rising inflation, cautious consumers and sluggish growth, all of which are set to drag on the British economy. Charles Dumas from Lombard Street Research says that while Brexit was a blow, unemployment is low at 4.6%, which will help support an economy preparing for higher inflation. These rises in prices will hit average shoppers at their local supermarket which, as Charles notes, is simply inevitable.
Meanwhile, Chris notes the Bank of England governor Mark Carney’s mistake in cutting the benchmark interest rate and suggests a reversal may be on the cards for 2017. But aside from domestic issues, in a world of interconnected economics, ‘Trumpanomics’ will be felt on the British shores, but to what extent is still unclear.
Talking of international events, whatever Britain faces in 2017 will be impacted by the elections in Europe. This is especially evident in Germany, where the sense of disconnect is growing, as it was in Britain and the United States, arguably resulting in both the Brexit vote and Donald Trump’s victory. Ultimately Charles is confident Britain can weather the storm, as the latter part of 2016 was nowhere near as bad as the doomsayers were predicting.