St James Place : Coining happiness

Happiness, according to Charles Dickens' character Wilkins Micawber, is to be found in achieving a surplus. Or, as the fictional debtor himself put it: 'Annual income twenty pounds, annual expenditure nineteen [pounds], nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.'

By that logic, Mr Micawber might judge the UK to be an unhappy place just now. Last week, the Office for National Statistics (ONS) published figures that showed consumption, that bellwether of UK economic health, was buoyant in the fourth quarter of 2016, as household spending rose 5% year-on-year. In itself, that might be cause for celebration, not least because headline growth in the fourth quarter was revised upwards to 0.7%, providing further proof that the UK economy has not missed a beat since the referendum.

This week's bulletin also includes:

• Consumption rates continued to rise in the UK, according to ONS figures released last week, but savings rates have been lagging.
• Results were encouraging for Lloyds and Barclays, and less so for HSBC, amid signs the sector may be leaving the crisis behind.
• Germany was confirmed to have been the fastest-growing G7 economy in 2016, and ended the year with a record surplus.
• Stocks struggled for direction as the Trump rally appeared to stall, and a Fed minutes release added to rate rise expectations.

View this week's Market Bulletin, which contains thoughts and opinions of St. James's Place and our range of investment managers on the key issues affecting investors.