GIMA Pulse Date of Report: 05/07/2018 a monthly snapshot of the UK Economy from

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1 GIMA Pulse Date of Report: 05/07/2018 a monthly snapshot of the UK Economy from Summary Oil prices have risen to even greater heights than the previous month following Donald Trump's statement that OPEC are manipulating the market and his warnings of punishments for companies purchasing Iranian oil. This could soon lead to Iran, OPEC's third largest supplier, halting exports the neighbouring countries and Iranian officials have stated that the cost per barrel will soon rise to $100. However, Saudia Arabia and Russia have been urged to increase production, in what may be a vain attempt to stabilise prices. This unrest has naturally resulted in a rise in automotive fuel prices. The UK service sector has risen to an eight-month high, as this accounts for just under 80% of the entire national economy, experts have suggested that the British economy would expand by 0.4% in the 2nd quarter. Demand is high for business and financial services, while the hot weather led to a pick-up in consumer spending in bars and restaurants. What's happened since last month? Index Period GDP DOWN 0.1% - to Euro DOWN 0.8% Jun-Jul to $ DOWN 1.4% Jun-Jul to Yen UP 0.5% Jun-Jul FTSE 100 DOWN 2.0% Jun-Jul FTSE 250 DOWN 1.8% Jun-Jul CPI NONE 0.0% Apr-May RPI DOWN 0.1% Apr-May Retail Sales UP 1.6% Apr-May Mortgage Approvals UP 2.4% Apr-May Unemployment NONE 0.0% Apr-May Energy Prices UP 0.3% Apr-May Crude Oil Prices UP 11.2% Apr-May Petrol Prices UP 4.2% May-Jun Diesel Prices UP 4.2% May-Jun Base Rate: 0.5% NONE 0.0% Jun-Jul Figures based on most recent month/period available. What's happened since this time last year? Index Period GDP DOWN 0.2% - to Euro DOWN 0.6% Jul-Jul to $ UP 1.4% Jul-Jul to Yen DOWN 0.8% Jul-Jul FTSE 100 UP 2.3% Jul-Jul FTSE 250 UP 6.7% Jul-Jul CPI DOWN 0.5% May-May RPI DOWN 0.4% May-May Retail Sales UP 5.8% May-May Mortgage Approvals DOWN 0.8% May-May Unemployment DOWN 0.4% May-May Energy Prices UP 2.4% May-May Crude Oil Prices UP 43.0% May-May Petrol Prices UP 4.4% May-May Diesel Prices UP 5.1% May-May Base Rate UP 0.25% Jul-Jul Figures based on most recent month/period available

2 GDP 1.80% 1.60% 1.40% 1.20% 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% 2013 UK GDP GDP as percentage growth/decline against previous quarter CP SA version ie Current Prices Seasonally Adusted Quarter UK GDP % 1.50% 1.70% 0.90% 0.10% 0.60% 1.60% 0.00% 0.40% 1.50% 1.20% 1.10% 1.30% % % % % % Exchange Rates Month /Euro /US $ /Yen Exchange Rates - Last 2 Years Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan May-16 Aug-16 Nov-16 Mar-17 Jun-17 Sep-17 Dec-17 Apr-18 Jul-18 Oct-18 Feb /Euro /US $ /Yen Exchange Rate / 100 (for chart) Mar Apr What 1 buys in Euros / $ / Yen Source: Bank Of England May Figures from 1st of each month Jun Jul Last Month % -0.8% -1.4% 0.5% Exchange Rates - Last 3 Months /02/ /03/ /03/ /04/ /04/ /05/ /06/ /06/ /07/2018 /Euro /US $ /Yen Exchange Rate / 100 (for chart) Source: Bank Of England Date /Euro /US $ /Yen 26/02/ /03/ /03/ /03/ /03/ /04/ /04/ /04/ /04/ /04/ /05/ /05/ /05/ /05/ /06/ /06/ /06/ /06/

3 FTSE 100 & FTSE 250 LAST 2 YEARS Month FTSE 100 FTSE 250 Aug-16 6,694 17,139 FTSE Indices - Last 2 Years Sep-16 6,746 17,850 Oct-16 6,984 18,184 21,000 Nov-16 6,917 17,523 Dec-16 6,753 17,497 19,000 Jan-17 7,178 18,141 Feb-17 7,108 18,240 17,000 Mar-17 7,383 18,983 Apr-17 7,323 18,972 15,000 May-17 7,250 19,805 13,000 11,000 9,000 Jun-17 Aug-17 Oct-17 7,544 7,424 7,438 20,011 19,864 19,957 Jul-17 Sep-17 Nov-17 7,377 7,439 7,488 19,320 19,786 20,328 7,000 Dec-17 7,300 19,854 Jan-18 7,648 20,681 5,000 Feb-18 7,490 20,186 May-16 Aug-16 Nov-16 Mar-17 Jun-17 Sep-17 Dec-17 Apr-18 Jul-18 Oct-18 Mar-18 7,168 19,539 Apr-18 7,026 19,389 FTSE 100 FTSE 250 May-18 7,520 20,348 Jun-18 7,702 20,985 Value at 23 Jun : 6,338 & 17,333 Source: London Stock Exchange Jul-18 7,548 20,606 Last Month % -2.0% -1.8% FTSE Last 3 Months 7,900 7,700 7,500 7,300 7,100 6,900 6,700 6,500 09/02/ /03/ /03/ /04/ /04/ /05/ /06/ /06/ /07/2018 FTSE ,500 21,000 20,500 20,000 FTSE Last 3 Months LAST 3 MONTHS Date FTSE 100 FTSE /02/2018 7,290 19,829 05/03/2018 7,116 19,567 12/03/2018 7,215 20,118 19/03/2018 7,043 19,695 26/03/2018 6,889 19,201 02/04/2018 7,026 19,389 09/04/2018 7,195 19,484 16/04/2018 7,198 19,772 23/04/2018 7,399 20,316 30/04/2018 7,509 20,285 07/05/2018 7,566 20,595 14/05/2018 7,711 20,800 21/05/2018 7,859 21,138 28/05/2018 7,639 20,770 04/06/2018 7,741 21,111 11/06/2018 7,737 21,319 18/06/2018 7,631 21,000 25/06/2018 7,510 20,775 19,500 19,000 09/02/ /03/ /03/ /04/ /04/ /05/ /06/ /06/ /07/2018 FTSE 250 FTSE an index of the top 100 companies in UK FTSE an index of the top 250 companies in UK Source: London Stock Exchange

4 CPI - Consumer Price Index Month CPI (%) Jun % CPI (%) Jul % Aug % 3.50% Sep % Oct % 3.00% Nov % Dec % Jan % 2.50% Feb % Mar % 2.00% Apr % May % Jun % 1.50% Jul % Aug % 1.00% Sep % Oct % Nov % 0.50% Dec % Jan % Feb % 0.00% Mar % Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Apr % CPI - inflation measure which examines weighted average of prices of a basket of consumer goods May % & services, such as transportation, food & medical care RPI - Retail Price Index Month RPI Jun % RPI Jul % 4.50% Aug % Sep % 4.00% Oct % Nov % 3.50% Dec % Jan % 3.00% Feb % Mar % 2.50% Apr % May % 2.00% Jun % Jul % 1.50% Aug % Sep % 1.00% Oct % Nov % 0.50% Dec % Jan % 0.00% Feb % Mar % Apr % RPI - inflation measure which is broadly the same as CPI but also includes home costs May % e.g. mortgage repayments/rent/council tax Retail Sales Month billion Seasonally Adjusted Values May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun-17 Aug Jul-17 Sep Oct Nov Dec billion Trend Jan Feb Total Retail Sales Excluding Automotive Fuel Mar Figures based on weeks; every 3rd month is a 5-week month Apr May Year-On-Year Change billion 5.81%

5 Mortgage Approvals Month Approvals Approvals Jul-16 64,000 Aug-16 61,500 75,000 Sep-16 61,000 Oct-16 67,000 70,000 Nov-16 67,500 Dec-16 67,500 Jan-17 68,500 65,000 Feb-17 67,500 Mar-17 66,000 60,000 Apr-17 65,000 May-17 65,000 Jun-17 64,500 55,000 Jul-17 69,500 Aug-17 67,000 50,000 Sep-17 66,000 Oct-17 65,000 Nov-17 65,000 45,000 Dec-17 61,000 Jan-18 67,000 Feb-18 64,000 40,000 Mar-18 63,000 May-16 Aug-16 Nov-16 Mar-17 Jun-17 Sep-17 Dec-17 Apr-18 Jul-18 Apr-18 63,000 Total number of mortgage approvals by banks in UK Source: Bank of England May-18 64,500 Last Month % 2.4% Unemployment Unemployment 5.00% 4.90% 4.80% 4.70% 4.60% 4.50% 4.40% 4.30% 4.20% 4.10% 4.00% Unemployment as percentage of available workforce; figures relating to quarter ending in month shown Month Unemployment Jun % Jul % Aug % Sep % Oct % Nov % Dec % Jan % Feb % Mar % Apr % May % Jun % Jul % Aug % Sep % Oct % Nov % Dec % Jan % Feb % Mar % Apr %

6 Energy Prices Month Price Index Price Index Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Based on starting index of 100 in 2010 Apr May Last Month % 0.3% Crude Oil Prices Month Oil Prices Oil Prices Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Crude Oil Price Index; 2010=100 Last Month % 11.2% Automotive Fuel Prices Month Petrol Prices Diesel Prices Automotive Fuel Prices Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Petrol Prices Diesel Prices Apr May Road fuel prices; pump price pence/litre Source: gov.co.uk Jun First week of each month Last Month % 4.2% 4.2% Forecasts

7 Summary Economic forecasting is notoriously difficult and often depends on the mindset of the forecaster. However we have included some highlights below from the most recent quarterly Bank of England Inflation Report which provides a comprehensive analysis from many sources including their own. The following charts are re-produced from Bank Of England Inflation Report, May Forecast Interest Rates Chart shows latest forecast using solid line. UK interest rates are expected to rise more rapidly than previously thought at the begi to 1.25% by 2021 which is slightly higher than the previous forecast (dashed line) with England expected to continue raising rates to combat high inflation. Sources: Bank of England, Bloomberg, European Central Bank (ECB) and Federal Reserve (ref 1.3p7) Forecast GDP The fan chart shows highest probability in the central, darkest band. Despite an unstable yet rising projection for 2018, GDP is expected to show 1 to 2.5% growth over next 2-3 years, which is the same as the prediction from last quarter's report. Forecast Inflation (CPI) The fan chart shows highest probability in the central, darkest band. The Government's 2% target is shown as horizontal line. Depsite a large spike in the final quarter of 2017, inflation is expected to then slow towards the end of the 2018, easing off to 2% by the end of 2020, which is the target to provide the greatest stability for an economy.