Uncertainty is dogging the UK economy as Brexit looms large.
The prospect of leaving the European Union (EU) in less than two years is now one of the biggest worries for advisers' clients.
In his Autumn Budget, chancellor Philip Hammond warned of slowing GDP growth in the UK, while at the same time revealing £700m had already been invested in the Brexit negotiations, with another £3bn set aside for the next two years.
Guy Stephens, technical investment director for Rowan Dartington, admits: "Whatever your political persuasion, this is not good for economic and consumer confidence."
It is not just economic growth that has stalled but other UK statistics are causing some concerns among economists, advisers and investors.
Low productivity growth and wage growth, creeping inflation and potentially rising interest rates are potential headwinds.
Azad Zangana, senior European economist at Schroders, warns: "Not only could higher Brexit uncertainty cause inflation to rise, but also confidence to fall, reducing business investment, and moving some jobs overseas."
But investors in UK equities would be forgiven for thinking Brexit has in fact been a boost for stockmarkets.
The FTSE 100 index has been steadily climbing for the past 12 months, as a weakened sterling helps overseas revenues.
So what is in store for the UK economy as the government treads a path towards departing the EU?
This report will look at the prospects for UK investors leading up to and beyond Brexit.
Ellie Duncan is deputy content plus editor at FTAdviser
Brexit is by far the biggest client fear
Brexit uncertainty and the future of the UK's economy when we leave the European Union is the biggest fear preying on clients' minds, advisers have said.
A snapshot poll carried out by FTAdviser among readers this month revealed Brexit was the biggest worry for clients, according to 64 per cent of the advisers responding to the question 'What is the biggest concern for your clients at the moment?'.
Global politics, even including rising tensions between North Korea and the US, only chalked up 17 per cent of the vote, while inflation - at 6 per cent - and interest rate rises - at 13 per cent - seemed to be barely bothering clients, according to the FTAdviser Talking Point poll.
With the uncertainty around what Brexit will entail, and how this might affect the UK economy, the overall financial stability of the country appears to be in the hands of politicians, which worries some investment advisers.
Guy Stephens, technical investment director for Rowan Dartington, says: "Whatever your political persuasion, this is not good for economic and consumer confidence.
"The recent interest rate rise and the preceding guidance from the Bank of England have stopped speculators shorting sterling and provided some stability.
"That said, if the Brexit negotiations do take a decisive turn towards a ‘no deal’ scenario, which is now being seriously considered in Brussels and on Wall Street, then we would probably see a leadership challenge.
"Weak leaders are always bad for economic growth, especially when the alternative is so polarised in political views."
Mr Stephens adds: "Businesses cannot invest on a three-year view if they don’t have the stability of economic and tax policy.
"The UK’s productivity growth is already demonstrably inferior to that of other G7 countries and without clarity soon, this will remain dormant and fall further behind."
FTAdviser has previously reported that Conservative MP John Redwood, a prominent advocate of the UK leaving the European Union and chief strategist for investment firm Charles Stanley, had been urging investors to reduce their exposure to UK assets as a result of Brexit fears.
However, there are many other concerns on the horizon that the lay investor might not know about, but which are more pressing on the financial services industry.
According to the Tax Incentivised Savings Association's (Tisa's) annual report, Brexit concerns are outgunned by the incoming Mifid II regime, which will be law from 3 January onwards, despite being a European Union regulation.
In the report, Jeffrey Mushens, technical policy director for Tisa, wrote: "Regardless of Brexit, Mifid II continues to apply to UK financial services and will be incorporated into UK regulation in January 2018.
"This is a significant piece of regulation which will have a major impact on the financial services industry, requiring a great deal of preparation over a tight timescale."
The high level of concern over what Brexit might mean has barely abated over the past year.
In November 2016 FTAdviser conducted a similar poll, which found 57 per cent of advisers were concerned about a 'Hard Brexit' more than other issues, such as a slowdown in China or the effect of a new Republican President in the US White House.
At the time, some commentators expressed positivity about opportunities for Britain when it came to the Brexit negotiations.
Rishi Sunak, MP for Richmond (Yorks), said: "Upon leaving the European Union, Britain will find itself with more opportunities for economic innovation than at any time in almost 50 years.
"As the date of our departure draws closer, it will be the responsibility of government to ensure Britain is not timid in seizing those opportunities."
However, the Federation of Small Businesses has recently called on the government to give small firms a "firm commitment to a transition post-Brexit" amid reports of protracted and difficult Brexit negotiations with European politicians.
Simoney Kyriakou is content plus editor at FTAdviser
The House View from Schroders
The economics view
The inaugural Autumn Budget was meant to be a quiet affair when first conceived, but the result of the snap general election earlier this year made this event crucial not only for the government, but for the chancellor himself.
Under pressure to deliver a bold and positive vision of the UK’s future, the chancellor Phillip Hammond started the speech with an upbeat introduction of the economy defying the expectations of more negative forecasts, and promising to face challenges head on, seeking out opportunities.
Unfortunately, the reality of this Budget shows the enormously difficult position the chancellor is in.
Downgrades to OBR’s forecasts
The headline from the Budget will be the large downgrades to the UK’s future path of GDP and productivity growth. The independent Office for Budget Responsibility (OBR) has downgraded its forecast for real GDP growth in each year of the forecast, with nominal GDP 2.5 per cent lower by the end of the forecast horizon.
This naturally led to a higher forecast for borrowing in coming years, with most of the chancellor’s headroom removed.
Measures to support NHS and housing
There was a small net fiscal giveaway in this budget too from the chancellor, with most funding directed towards the National Health Service (NHS), measures to encourage greater investment, and housing.
The NHS and housing had to be targeted by the Treasury as the public considers both these areas to be in crisis. An additional £1.6bn will be given to the NHS next year, well short of the £4bn plus requested by the service.
For housing, £44bn of funding and guarantees will be provided in coming years to support home building, but the chancellor’s well-trailed “rabbit out of the hat” was abolishing stamp-duty for first-time buyers where the value of the home is £300,000 or less outside of London, and on the first £300,000 of a home valued at up to £500,000 in London.
While the chancellor’s efforts to boost housing supply should be welcomed and are long-overdue, the scrapping of stamp duty for first-time buyers (the majority of buyers in the market at any point in time) will likely serve to distort property prices further.
Indeed the OBR has said that it does not expect the policy to help first-time buyers, but to help sellers.
Minimal changes to personal taxes
Personal taxes were largely left unchanged, though personal allowances and the higher tax threshold will be increased from April next year.
The now annual obligatory freeze of fuel duties was delivered, but new levies on diesel cars were announced.
Otherwise, the national living wage will be increased by 4.4 per cent from April, along with the national minimum wage, which now only applies to younger workers.
Overall, this was not the bold, game-changing Budget that many in the chancellor’s own party were demanding. However, Hammond’s giveaways may just about be enough to satisfy the headline writers, and keep him in his job for now.
Azad Zangana is senior European economist and strategist at Schroders
The equities view
Despite the chancellor’s stamp duty announcement and commitment to £44bn of extra funding for the housing market, homebuilders’ share prices were down a little on 22 November.
The Help to Buy scheme, which has been a big support for the sector, is due to end in 2021.
It remains to be seen whether the abolition of stamp duty for first-time buyer purchases up to £300,000 will be an additional boost to the sector, or ultimately replace the benefit that Help to Buy has, until now, provided.
Investors appear to be underwhelmed by these housing market announcements. Until now, homebuilders have been in a great sweet spot thanks to relatively subdued increases in supply, robust demand, low interest rates and Help to Buy.
Shares for the sector are up about 35 per cent over the past 12 months so I think we are now seeing some profit-taking.
Sue Noffke is fund manager, UK equities at Schroders
The fixed income view
The gilt market seems unfazed by the Budget and sterling has held up pretty well.
The OBR growth forecasts have been lowered by more than the market expected and Mr Hammond is being more prudent on the Budget deficit than he might have been.
This is resulting in less likelihood that the BoE will raise interest rates much more (if at all).
In addition, gilt issuance, while a little bit higher than expected from 2019 onwards, isn’t too much to worry about.
The downgrades of the UK’s productivity forecasts are also likely to offset any inflationary pressures from the increases in the National Living Wage, as will the freezing of duty on alcohol and air fares.
Market inflation expectations were a little lower as a result.
Alix Stewart, fund manager, fixed income at Schroders