Three months ago we’d just had the result of the UK’s referendum on continued membership of the European Union. It would be easy to think that Brexit is now the only show in town, especially with new Prime Minister Theresa May confirming on Sunday 2nd October that Article 50 – beginning the formal process of leaving the EU – will be triggered by March 2017.
The effects of this announcement are clearly being felt in the financial markets. On the morning of Tuesday 4th October, the pound had sunk to a 31 year low against the dollar, while the FTSE 100 was above 7,000 and apparently heading for a record high.
In fact, the rest of the world has been quite busy while Mrs May was re-shuffling her cabinet. Hillary Clinton and Donald Trump were confirmed as their respective parties’ Presidential nominees – and have been roundly abusing each other ever since. When they lifted their eyes from the hustings they’ll have seen that the US economy continued to turn in its normal mixture of good and bad news throughout the summer.
In the Far East, there continued to be serious worries about China – both the slowdown in the economy and a potential banking crisis – whilst the Bank of Japan came up with yet another stimulus package for the economy. Even more worryingly – for the region and the wider world – North Korea claimed a fifth successful nuclear test, to inevitable and widespread condemnation.
The quarter saw a rally in the price of oil. Having been as low as $30 a barrel in February, the price briefly touched $51 a barrel in August. By the end of September, OPEC had agreed a preliminary deal to cut production for the first time in eight years and the price was hovering around $49 a barrel. We’ve probably said goodbye to very low oil prices for the foreseeable future.
