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Hi I'm Trevor Greetham Head of Multi Asset for Royal London Asset Management and I'll be talking to you about the economic outlook over the next three months.

It’s really a mixture of economics and politics. You’ve got two big things going on: you've got a standoff  between President Trump and China over trade wars. You've also got a standoff between the UK government and the European Union over brexit. Starting with the global picture the world economy has been slowing down over the last year or so we've had a lot of bad news in the auto industry and bad news out of China.

You've also had an increase in tensions between President Trump and the rest of the world over trade which has been hurting growth at the same time. But the US consumer remains strong and this has been a very long economic expansion because inflations remains low and therefore interest rates have remained low. We think that expansion will carry on, you had an interest rate cut recently in America, we may see another one in the next three months. That will help to boost the US consumer and we think the world economy will probably pick up again in into 2020. There's also a strong possibility that President Trump will backtrack on some of the trade terrace he's been pushing through ahead of the 2020 presidential election in America he may want to see the economy get stronger as well.

Closer to home there's a lot of uncertainty around Brexit. The UK is due to leave the European Union on the 31st of October. At this stage we still don't know whether we will leave with no deal, whether there be some new kind of deal, or whether we won't leave at all because the decision may be may be deferred until further out. If we were to leave with no deal I think the pound would continue to go down. It's likely to be quite damaging for the UK economy over the medium term if we leave without a deal. But there are parts of the portfolio that would do better if the pound were weaker. So stock markets in particular will increase in value if the pound goes down. On the other hand if there's a better deal than that or if Brexit is deferred then the property part of your portfolio is likely to do better. So you've got a mixture of different assets and that should even out some of the bumps in what is quite an uncertain situation.

The big picture there is lots of politics around at the moment, some bad news in terms of the economy but we think that the world economy is likely to rumble on and that you mean pretty, pretty good returns over the next year or two. We'll continue to monitor things and we'll report back to you on the situation as it evolves in three months’ time.



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