UK Economics Focus Tightening fiscal policy soon would be fiscal folly At some point, there may need to be a fiscal squeeze to pay for any lasting increase in spending caused by the COVID-19 crisis and increases in age-related spending. But the biggest danger is that... 8th December 2020 · 18 mins read
UK Economics Focus Brexit – deal or no deal is not the big issue As the differences between a Brexit deal and a no deal are not as big as they once were, the economic costs of a no deal have diminished. The bigger risk is that relations between the UK and the EU... 1st October 2020 · 44 mins read
Global Economics Focus Lasting blow to supply capacity is not inevitable It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government... 29th June 2020 · 28 mins read
Global Economics Focus Will the coronavirus permanently change behaviours? As long as social distancing isn’t practised for many years, then those behavioural changes triggered specifically by the coronavirus crisis will probably prove temporary. But those changes that were... 23rd June 2020 · 33 mins read
UK Economics Focus Another decade of ultra-loose monetary policy The swift and significant response of the Bank of England to the coronavirus crisis has prevented a financial crisis, but we think the Bank will need to do much more than the markets currently expect... 4th June 2020 · 31 mins read
UK Economics Focus Budget 2020 – Austerity is out, spending is in The coordinated fiscal and monetary stimulus announced by the Chancellor and the Bank of England today shows that policymakers are pulling out all the stops to ensure that the coronavirus results in... 11th March 2020 · 10 mins read
UK Economics Focus Budget Preview: Safety first The new Chancellor Rishi Sunak’s first priority in the Budget on Wednesday 11th March will be to deliver a package of measures to help those areas of the economy likely to be hit hardest by the... 4th March 2020 · 18 mins read
UK Economics Focus Will the fiscal stimulus deliver much bang for its buck? We think that the coming fiscal stimulus will raise annual GDP growth by about 0.6ppts this year and 0.25ppts in 2021. This is part of the reason why we expect GDP growth to beat the consensus... 3rd February 2020 · 13 mins read
UK Economics Focus What to expect as the UK negotiates its future relationships As the negotiations over the UK’s new relationship with the EU will be arduous and long, business investment probably won’t rise much this year as firms will worry about the risk of there being... 23rd January 2020 · 17 mins read
UK Economics Focus Will the next move in interest rates be up or down? We suspect that interest rates will neither go up nor down this year! But the markets may be caught out further ahead if, as we expect, a fiscal stimulus and easing in Brexit uncertainty results in... 21st January 2020 · 12 mins read
UK Economics Focus The election and its implications for the economy and markets The election on 12th December is likely to mark the beginning of a new phase for the UK economy, determining not only the type of Brexit (or if Brexit happens at all) but also the size and shape of... 26th November 2019 · 19 mins read
UK Economics Focus OBR to drive final nail into the fiscal rules coffin Although the Office for Budget Responsibility won’t expose the full deterioration in the public finances when it updates its forecasts on Thursday, it’s clear that it is only a matter of time before... 6th November 2019 · 10 mins read
UK Economics Focus Rewriting the fiscal rules One way or another, the UK is destined for looser fiscal policy. How much and in what form is unclear, but the one thing that is clear is that it will require a new set of fiscal rules. There are many... 24th October 2019 · 14 mins read
UK Economics Focus How low can the natural rate of unemployment go? A continued decline in the natural rate of unemployment over the past 15 years means that there is probably a little bit more slack in the labour market than indicated by the near-record low... 2nd October 2019 · 14 mins read
UK Economics Focus Will the big current account deficit cause a problem? Were the UK an emerging market the hedge fund vultures would already be circling following the rise in the current account deficit to 4% of GDP last year – the largest in the developed world. While... 22nd July 2019 · 13 mins read
UK Economics Focus Brexit not the only driver of UK financial markets While we think that the twists and turns of the UK’s journey out of the European Union will have a bearing on Gilts and sterling, that won’t be the only factor driving them. What’s more, we doubt that... 17th July 2019 · 14 mins read
