The UK government borrowing statistics for November were released on 21st December. These showed that public sector net borrowing decreased by £7.7bn year to date, relative to the same period last year. The fall in borrowing for the month of November was less than forecasters were expecting; however, month on month figures are volatile and need to be analysed with caution. Conversely, the figures for October were far ahead of expectations on the back of higher tax receipts. Overall, the government is on target to meet its revised deficit reduction plans, which may give the Chancellor, Phillip Hammond, some flexibility when it comes to setting out spending plans over the coming year. Many are expecting increased infrastructure spending and targeted allocations to areas which will increase productivity and equality.

Seemingly positive news for the UK economy was also released in the run up to Christmas, showing that the economy grew faster than expected in the third quarter (July to September). The ONS revised their estimated growth rate from 0.5% to 0.6% for the quarter. However, they also cut the estimates for each of the first two-quarters by 0.1%. As a result, the growth rate for the year to date is little changed, although the post-referendum economy is better than expected.

Global equity markets entered the New Year achieving all-time highs. Markets have been driven by optimism over US growth and sharply higher oil prices supporting the heavily weighted oil and gas sector of the market. Furthermore, in the UK, exporters and global company shares were buoyed by a weakening sterling. It will be crucial for 2017 to deliver on the growth expectations now built into markets and investor expectations. With further US interest rate rises and geopolitical risks these expectations may be challenged.

(From 19^th December 2016)

US Non-Farm payrolls for December are released on Friday in conjunction with the unemployment rate.