Helping CFOs plan through changeable conditions
For the first time in 2017, the Accountagility Index (AAX) has moved into negative territory with a score of 4.95. This is down 11 basis points from last month’s reading of 5.06. The index records UK political and economic health in a score out of ten, and any score below 5.00 is negative.
The ongoing political instability and the start of Brexit talks that appear to confirm the hard Brexit were the key downward drivers. Market reaction to the election result also contributed, and inflation continues to advance.
July Brexometer Reading
The Brexometer is still ahead of the nadir of July last year, when it dropped to 4.02, but has lost 34 basis points since a peak in March.
Businesses will be tracking different scenarios, based on this continuing political turbulence, and we are seeing our clients taking advantage of our agile planning solution to do just that.
The Accountagility Index Rating for July
In any “normal” year, the next two holiday months would be quiet, in terms of both politics and markets. However, the next month features a welter of new stats and figures which may reflect the new situation, as well as the delicate task that the Government has of getting the Queen’s speech through Parliament.
What will happen in July? Can the Brexometer return from the dark side? Keep following the Brexometer to find out.
What makes up the Accountagility Index (AAX)?
The data used to calculate the Accountagility Index are based on eleven key factors, all derived from a diverse range of independent and credible sources
- UK economic growth – A key building block of UK prosperity
- Markets – Reflects the health of larger British companies
- UK inflation – An important measure which needs to be carefully monitored
- Sterling strength – Affects imports, exports and confidence
- UK employment – Impacts so many aspects of UK economic activity
- UK Debt ratio – Tracks the UK’s progress against long term balancing of the books
- FDI (Foreign Direct Investment) – Illustrates the practical confidence levels from outside the UK
- Sentiment – Can be often the most important factor in how the economy is perceived
- Political stability/environment – A must include measure which can have instant impact on the big picture
- Progress on Brexit negotiations – Casts a very long shadow over all things
- Progress of International trade talks – A vital indicator of the UK’s international positioning