Following the UK’s Brexit vote, although consumer spending seemed unaffected, business confidence was hit hard. Every 3 months the accountancy practice Deloitte surveys UK finance directors. As Figure 1 shows, investment intentions (‘capex’ or capital expenditure) crumbled in the face of Brexit uncertainty, then the result. The net position in the third quarter of 2016 was –50%. In other words 50% more firms were negative about investment than were positive about it. For the same reasons discretionary spending was thrown into negative territory. That number includes spending on training as well as spending on advertising. You might expect a similar situation to have emerged following Donald Trump’s unexpected victory in the US presidential election, but that does not seem to be the case.
There appear to be five main strands to Trump’s economic plans:
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