Negative GDP in Q2. Resilient leading indicators. The BoE fears inflation at +12%. Monetary policy measured. Decreasing risks for the pound. Opportunities in bonds. Attractive relative valuations for equities.

Key points

• UK GDP advanced by +0.8% in Q1
• The 2nd quarter could be down by -0.2
• Surprising resilience of leading indicators in Q2
• Unemployment rate nears all-time low
• Loss of household confidence threatens consumption
• BoE fears inflation will rise to +12% in 2022
• New opportunities in the bond markets
• The BoE is gradually adjusting its monetary policy
• Risks to the British pound diminish
• Direct real estate shows signs of weakness
• Risk premiums still attractive for UK equities

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