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
UK Economics Focus Can the UK make the most of the lower pound? Concerns have been expressed that the UK’s export-dependent sectors, most notably manufacturing, no longer have the key ingredients necessary to make the most of the boost to their competitiveness... 12th May 2009 · 1 min read
UK Economics Focus Budget 2009 - The tip of the iceberg This Budget was a holding operation which left the really tough decisions required to sort out the public finances to be taken by whoever is Chancellor after the next election. The tax increases and... 22nd April 2009 · 1 min read
UK Economics Focus Which parts of consumer spending will recover first? Past experience suggests that durable consumer goods (such as household appliances) will be the first area of consumer spending to turn the corner in this recession, while spending on consumer... 15th April 2009 · 1 min read
UK Economics Focus Budget 2009 Preview - The great borrowing binge goes on Chancellor Alistair Darling faces the unenviable task in his second Budget of trying to offer the economy some much-needed support, whilst at the same time reassuring the markets that the public... 8th April 2009 · 1 min read
UK Economics Focus Just how deep is this fiscal mess? We have warned all along that the UK’s public finances were likely to suffer a much greater deterioration in the current downturn than the Chancellor and most other forecasters anticipated. But the... 27th March 2009 · 1 min read
UK Economics Focus Lending measures will not fill the hole Lending by those banks which are either wholly or partially state-owned is set to rise significantly. But we continue to doubt that overall lending is on track to grow at the rates needed to get the... 16th March 2009 · 1 min read
UK Economics Focus Will the lower pound stave off deflation? The sharp drop in the sterling exchange rate does not preclude the danger that a short bout of deflation driven by commodity prices later this year will be followed by a broader and longerlasting... 2nd March 2009 · 1 min read
UK Economics Focus Drag from stockbuilding to ease A fall in stockbuilding helps to explain why the economy contracted quite so sharply at the end of last year. Stocks are run down most at the start of a recession, suggesting that GDP should not keep... 25th February 2009 · 1 min read
UK Economics Focus Consumer spending rebound unlikely to last The strength of high street spending over the past month or two begs the question of whether we have underestimated the resilience of UK consumers. However, we continue to think that the consumer... 23rd February 2009 · 1 min read
UK Economics Focus Consumer spending rebound unlikely to last The strength of high street spending over the past month or two begs the question of whether we have underestimated the resilience of UK consumers. However, we continue to think that the consumer... 23rd February 2009 · 1 min read
UK Economics Focus The pros and cons of bank nationalisation Speculation is growing that the Government will soon take a majority stake in Lloyds, representing another step towards full nationalisation of large parts of the banking system. Full nationalisation... 16th February 2009 · 1 min read
UK Economics Focus Can pay freezes prevent further job losses? A number of companies have announced pay freezes in the past week or two. However, even if a significant proportion of the workforce foregoes a pay rise this year, we doubt that further sharp rises in... 11th February 2009 · 1 min read
UK Economics Focus The anatomy of the Great Depression of the 1930s There is still no universally accepted single cause of the Great Depression. But our analysis suggests that the main culprit for the role of catalyst was the bursting of the bubbles in the equity and... 19th January 2009 · 1 min read
UK Economics Focus What more can policymakers do? Should UK interest rates fall to zero, it is likely that UK policymakers will follow in the footsteps of the US Federal Reserve and adopt a formal policy of quantitative easing (QE). While QE is a... 16th January 2009 · 1 min read
UK Economics Focus Much bolder action required to boost bank lending Faced with soaring recession-related bad debts, we doubt that banks, if left to their own devices, will start lending enough to kick-start the economy. The Government will therefore have to force them... 15th January 2009 · 1 min read
