Shady Shaher Rafik Elborno - Head of Macro Strategy Research
Published Date: 30 March 2017
Britain’s Prime Minister Theresa May officially notified the European Union, that Britain is leaving the bloc, via a letter delivered to EU Council President Donald Tusk. The notice of the UK’s decision to leave the bloc under Article 50 of the EU’s Lisbon Treaty, paves the way for two years of tough negotiations that will shape the future of the UK economy and the nature of its relationship to the EU. While Prime Minister May has made it clear she is willing to walk away without any special deals, British officials have quietly signaled a willingness to soften their stance on contentious issues ranging from the so called EUR 60bn exit bill, strengthening bi-lateral security ties and the role of the European Court of Justice.
UK consumer credit slowed in February, though by less than expected. Data from the Bank of England showed consumer credit went up by GBP 1.441bn in February, against GBP 1.609bn in January, though the figures were higher than market estimates for a rise of GBP 1.3bn for Feb. Mortgage approval figures by lenders dropped to 68,315 in February against 69,114 a month earlier, according to data by the BOE. Markets and policymakers are closely monitoring for signs of “cooling off” in consumer spending, which has held up well through 2016, after the Brexit vote in June last year.
Bank lending growth in Saudi Arabia slowed down in February according to data from the Saudi central bank SAMA. Bank lending to the private sector slowed considerably to 0.3% y/y growth in February from 1.8% y/y in January, and down from the 10% y/y growth see the same month last year. The slowdown could be attributed to an improved flow of state funds through the economy, after the government stopped paying bills last year, forcing a lot of private sector companies to tap credit facilities, thus inflating bank lending growth. While bill payments have resumed, companies remain nervous about stubbornly low oil prices, and the prospects for further austerity measures by the government.