European stocks reacted with a slide this morning although the FTSE 100 held up better than the CAC and the DAX.
Industry expects economy to slow but households remain optimistic.
There is a discrepancy to be observed in Britain with businesses growing increasingly worried about the fallout of Brexit while households are still not fully aware of how the extraction from the EU will affect them.
The British Chambers of Commerce believes that the persistent economic and political uncertainty is likely to affect investment intentions and reduce the level of investment in the UK while lower trade due to Brexit is expected to hit UK economic growth. The UK business lobby has lowered its expectations for growth from 1.3% to 1.1% for this year and from 1.4% to 1.3% next year as net trade makes a negative contribution.
In contrast, UK households seem to be unjustifiably relaxed about their financial situation in the year ahead.
A survey Monday showed that their expectations are at the highest since mid-2016 and that their concerns about inflation have diminished. This has been backed up by data showing that consumer spending has increased slightly in August. The currency markets were in two minds over whether this optimism is misplaced or not.
The pound was marginally weaker against the euro, trading down 0.08% while it firmed against the greenback, up 0.18%.
UK investor to vote against Unilever moving its HQ
Aviva Investors, one of the top shareholders in Unilever, plans to fight against the company’s plan to close its UK headquarters and move all of its key operations to Netherlands, a decision largely forced by Brexit.
Aviva Investors believe the move could force UK shareholders to sell their stock and offered "no upside". Unilever’s share price has been on the rise since it announced the move in March but Monday’s news tipped the scales down and it declined 0.11%.
The news marks the first serious opposition from investors to the proposed move, but given the size and influence of Aviva in the market, could lead other investors in Unilever stock to vote similarly.