UK Economics Focus The VAT threat to consumer spending The looming reversal of the temporary VAT cut should boost household spending at the end of this year, as consumers bring forward their spending. But this will just come at the expense of spending... 28th October 2009 · 1 min read
UK Economics Focus Spare capacity could yet turn inflation negative Inflation is likely to pick up again in the next few months but, further ahead, the huge amount of spare capacity that is building up in the economy will bear down heavily on core price pressures... 13th October 2009 · 1 min read
UK Economics Focus From banking crisis to fiscal crisis? The measures put in place by governments to support their banking sectors and economies have helped to avert a full-scale financial meltdown and a 1930s-style economic depression. But the full costs... 12th October 2009 · 1 min read
UK Economics Focus Could the UK have a creditless recovery? With a significant pick-up in bank lending still looking unlikely, hopes are pinned on the economy achieving a so-called “creditless recovery.” This type of upturn has been seen before, both in the UK... 14th September 2009 · 1 min read
UK Economics Focus Could the UK have a creditless recovery? With a significant pick-up in bank lending still looking unlikely, hopes are pinned on the economy achieving a so-called “creditless recovery.” This type of upturn has been seen before, both in the UK... 14th September 2009 · 1 min read
UK Economics Focus Bank lending still set to fall well short Conditions in the banking system have clearly been improving. However, we doubt that this transforms the lending outlook. Indeed, we continue to think that over the foreseeable future, bank lending... 26th August 2009 · 1 min read
UK Economics Focus Bank lending still set to fall well short Conditions in the banking system have clearly been improving. However, we doubt that this transforms the lending outlook. Indeed, we continue to think that over the foreseeable future, bank lending... 26th August 2009 · 1 min read
UK Economics Focus Recent house price rises lack a firm foundation The recent rises in the major house price indices have fanned hopes that the worst of the housing market correction is now behind us. Yet price rises driven only by a temporary imbalance between the... 21st August 2009 · 1 min read
UK Economics Focus Can investment drive the recovery? With a fiscal consolidation looming, households facing pressure to raise their saving rates and the lower pound giving limited support to exports, it is hard to see what might turn the recent signs of... 13th August 2009 · 1 min read
UK Economics Focus How do we get out of this fiscal mess? Getting the public finances back to a sustainable position within a reasonable timeframe is likely to require both sizeable tax increases and the tightest squeeze on public spending seen for... 28th July 2009 · 1 min read
UK Economics Focus Recent house price rises lack a firm foundation The recent rises in the major house price indices have fanned hopes that the worst of the housing market correction is now behind us. Yet price rises driven only by a temporary imbalance between the... 21st July 2009 · 1 min read
UK Economics Focus The hardest part of QE is yet to come We do not think that reversing quantitative easing (QE) is an immediate concern for the Bank of England. Not only will the large amount of spare capacity keep inflationary pressures subdued for some... 13th July 2009 · 1 min read
UK Economics Focus How will the policymakers respond to recovery? The markets have assumed that the initial and main policy response to a recovery in the UK economy will come from higher interest rates, and at a fairly early stage. But there are some good reasons... 6th July 2009 · 1 min read
UK Economics Focus Why is UK retail spending so strong? One of the puzzles of this recession is why consumer spending on the high street is so much stronger than spending off it. The credit crunch driven nature of the slowdown appears to have played a key... 15th June 2009 · 1 min read
UK Economics Focus Is the lower pound already helping? On the face of it, the plummeting level of UK exports suggests that the sharp drop in the sterling exchange rate over the last year or two has done nothing to cushion the UK’s external sector from the... 27th May 2009 · 1 min read
UK Economics Focus Pay cuts intensify deflation danger Average earnings in the UK are already falling outright for the first time since the 1930s. We expect them to fall further, intensifying the risk of a prolonged period of deflation. 18th May 2009 · 1 min read