27 / 40
GDP growth rates in first quarter (figures published July 2017
1
)
% change over the previous quarter
The Federal Reserve plotted a more determined
course, raising rates by a quarter point and forecasting
a further rise later in the year. In fact, US in ation
had once more dipped just below 2%by quarter end,
and rst quarter GDP growth was disappointing,
while consumption fell to an eight-year low.
The S&P 500 ended the quarter up 2.7%, aided
by buoyant corporate earnings.Moreover, theVIX
(which measures volatility) refused to depart from
its extended lows for long, despite political tensions
over the FBI, climate change and trade with China.
The corporate outlook also looked bright in
Japan, where business con dence struck a three-year
high, pushing the Nikkei 225 up by more than 5%.
In the eurozone,meanwhile, the growth rate
THE INVESTOR
|
27
THE QUARTERLY REPORT
Masao Yamazaki. Sources: 1 ec.europa.eu, July 2017; 2 ons.gov.uk/economy, June 2017
The UK
household
savings rate
slipped to a
50-year
low
Ireland, Luxembourg and Malta: data not available for first quarter 2017.
*EA19: the 19 countries of the Euro area from 1.1.2015 **EA28: the 28 member states of the EU at 1.7.2013
overtook that of the US and UK, unemployment
dipped to an eight-year low and business con dence
maintained at an extended high. Structural tailwinds
surely helped, but so too did the election victories of
Emmanuel Macron, France’s new centrist,
Europhile president. French stocks rose quickly,
although the broader Euro rst 300 gained by just
1.1% over the period. In late June,Mario Draghi
indicated that the ECB’s quantitative easing
programme might soon begin to taper.
Meanwhile, EU exit talks formally began and the
UK quickly dropped its former objections to EU
‘sequencing’ in negotiations.As the quarter ended,
there were signs that business would henceforth
enjoy a louder voice in Downing Street.
United Kingdom
Greece
France
Italy
Netherlands
Sweden
Belgium
Denmark
Germany
Croatia
Cyprus
Estonia
Spain
Slovakia
Bulgaria
Portugal
Poland
Finland
Czech Republic
Hungary
Lithuania
Slovenia
Latvia
Romania
Austria
*EA19
**EU28
0.0
0.5
1.0
1.5
2.0
As the quarter ended, there were signs
that business would henceforth enjoy
a louder voice in Downing Street