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Having delayed Brexit from 29 March to 12 April, Prime Minister Theresa May agreed a new Brexit deadline of 31 October with EU leaders. As well as drawing out the uncertainty that has intensified over the last few months, this decision also means that the UK will have to take part in European Parliamentary elections in late May.
European Council (EC) President Donald Tusk urged the UK to make the most of the extension, saying: “During this time, the course of action will be entirely in the UK’s hands”. Mrs May’s Brexit deal has already been rejected by UK MPs three times, and a variety of votes designed to break the impasse were all defeated in the House of Commons. The Government and Labour have held talks to try and reach a consensus about Brexit, but a no-deal Brexit remains on the table if MPs are unable to reach an agreement.
The FTSE 100 Index rose by 1.9% over April. The US economy expanded at an annualised rate of 3.2% during the first three months of 2018, compared with the rate of 2.2% achieved in the fourth quarter of 2018. Growth was fuelled by export activity and inventory-building and the data helped to allay immediate concerns of an intensifying economic slowdown. The Dow Jones Industrial Average Index rose by 2.6% during April, and the S&P 500 Index and the technology-rich Nasdaq Index hit new highs over the month.
Having previously stated that it would maintain its ultra-low interest rate for an “extended period”, the Bank of Japan (BoJ) provided fresh detail during April, stating that it did not intend to raise interest rates until “at least through around spring 2020”. The BoJ also trimmed its forecasts for economic growth in 2019 from 0.9% to 0.6%, and in 2020 from 0.9% to 0.8%. The Nikkei 225 Index rose by 5% over the month.
Investors were cheered by the news that quarterly economic growth in the eurozone had rallied during the first three months of 2019, picking up to 0.4%, compared with expansion of only 0.2% in the final quarter of 2018. Export activity helped Italy to move out of recession during the period. Elsewhere, the rate of unemployment in the euro area eased from 7.8% to 7.7% in March. During April, the Dax Index rose by 7.1%.