DAVY VIEW

The likelihood of today’s UK GDP showing a contraction in the economy in Q2 2019 is on a knife-edge, resting on whether the resilient services sector can compensate for further declines in construction and manufacturing. The consensus is that the UK saw a flat Q2. There is a clear risk that a negative out-turn will hit sterling, fuel fears of a recession and place even greater focus on the likely impact of Boris Johnson’s ‘no-deal’ strategy.