Market Perspective - Leeds October 2015-1644

Market Perspective - Leeds October 2015-1644

Brewin Dolphin UK Economic Perspective: Newcastle, 11 th December 2015 Ben Gutteridge, CFA: Head of Fund Research UK Consumer Reasons for Optimism 25.0 24.5 24.0 23.5 23.0 22.5 22.0 21.5 21.0 20.5 20.0 31.0 30.5 30.0 29.5 29.0 28.5

28.0 27.5 27.0 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 Total employment (LHS) Full time employment (RHS) UK Average Earnings 8 6 4 % YoY Total Employment (millions) 31.5 2 0 -2 -4 -6 Average Earnings YoY -8 Average Earnings less CPI

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 UK CPI YoY (%) 6 10% 5 UK retail sales and headline consumer confidence 20 3 2 10 6% 0 4% -10 2% -20 0%

-30 -2% 1 -40 -4% 0 -6% '05 '07 '09 '11 '13 Consumer confidence Retail sales YoY, ex Fuel 8% 4

Retail Sales, ex Fuel YoY Consumer Confidence -50 '99 '00 '01 '02 '03 '04 '05 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 -1 Source: Bloomberg/BoE UK Housing 8 UK mortgage rates 110 7 6 UK House Price Index, rebased to 2007 105 5 100

4 3 2 1 75% LTV 2 year Fixed Mortgage Rate 95 90% LTV 2 year Fixed Mortgage Rate 90 2 Year Swap rate 85 0 '04 '05 '06 '07 '08 '09

'10 '11 '12 '13 '14 '15 80 '07 '08 '09 '10 '11 '12 '13 '14 '15

Source: Bloomberg/Datstream UK Consumer Reasons for Caution UK Forward Rates UK 1Yr Forward rates (%) 2.5 2 1.5 1 0.5 0 1 2 3 4 5 6 7 8 9

10 Years Forward Source: Bloomberg Economic Rebalancing? UK Trade UK Trade in Goods (bn) 0 -2,000 -4,000 -6,000 -8,000 -10,000 -12,000 -14,000 -16,000 Nov 05 Nov 06 Nov 07 Nov 08 Nov 09

Nov 10 Nov 11 Nov 12 Nov 13 Nov 14 Source: Bloomberg Currency Strength Trade Weighted Sterling 110 100 90 80 70 60 Nov 05 Nov 07 Nov 09

Nov 11 Nov 13 Nov 15 Source: Bloomberg Chinese Private Sector Leverage Chinese Total Social Financing/GDP (%) 220 200 180 160 140 120 100 Sep 05 Sep 07 Sep 09 Sep 11

Sep 13 Source: Bloomberg Sep 15 Sino the Times Chinese Industrial Production YoY (%) Chinese GDP YoY (%) 25 20 15 10 5 0 Sep 05 Sep 07 Sep 09 Sep 11

Sep 13 Sep 15 Source: Bloomberg Yuan Direction RMB/USD 6.5 6.4 6.3 6.2 6.1 6 5.9 5.8 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Source: Bloomberg Eurozone lending rates are falling

EU Referendum Brexit? What are the terms? Who will lead the campaigns? How will refugee crisis evolve? What can we learn from recent elections? Consequences for FDI? Consequences for markets? UK Fiscal Consolidation

Deflation is the only constant GROWTH 100% RECOVERY BOOM US Eurozone Japan UK Asia China India Brazil Russia 50% STAGNATION 0% 0% 50% INFLATION

SLOWDOWN 100% Source: Bloomberg/Brewin Dolphin Summary Economic recover seems set to continue Decent jobs/wage growth Housing Private sector leverage a concern Global Trade remains a difficult environment Europe improving China slowing Currency Strength Disclaimer The value of investments can fall and you may get back less than you invested. Past performance is not a guide to future performance.

If you invest in currencies other than your own, fluctuations in currency value will mean that the value of your investment will move independently of the underlying asset. The information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness. The opinions expressed in this document are not necessarily the views held

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