The UK is in a recession, but remember, you’re in it for the long term!

You will no doubt have seen and heard the news that Britain has entered the deepest recession since records began as figures were released for the three months to June.

Going forward, unemployment levels are expected to increase and there are concerns about a “second wave” of infection and further lockdown restrictions. Another worry is the continued slow progress on Brexit negotiations.

However, monthly figures for the economy indicate that an economic recovery strengthened in June as lockdown measures were gradually relaxed. Gross Domestic Product (GDP) grew by 8.7% in June compared with the previous month, faster than expected by City economists. But, coming from such a low point, there is still a big recovery to be made, with GDP levels still approximately one-sixth below February levels.

In good news, the FTSE 100 has fared well in the last few weeks and was up again on Wednesday, the day the recession was announced. You might think It’s a surprising response to news of recession, but the news was expected and has largely been “priced in”.

There’s no doubt that the next few months will prove potentially volatile. Some sectors will do well, whilst others won’t and we’re sure to see unemployment figures increase. However, as always, we’re recommending a long-term view on investing. Times of volatility are normal and, generally, we would not suggest making any changes. However, if you’re concerned about your particular circumstances and would like to talk it through, please feel free to pick up the phone, we are always pleased to hear from you.

The information given here is for information purposes only and is not intended to constitute financial, legal, tax, investment or other professional advice. It should not be relied upon as such and Jane Smith Financial Planning cannot accept any liability for loss for doing so. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment. Past performance is not a reliable indicator of future performance.

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