UK Economics Update Dovish hold suggests rates will be cut further than markets expect While the Bank of England left interest rates at 4.75% today, it struck a slightly more dovish tone. This supports our view that the next 25 basis points (bps) rate cut will come in February and that... 19th December 2024 · 4 mins read
UK Economics Update Three ways the Spending Review could affect fiscal policy With pressures on public spending continuing to grow, this has raised the chances that the Chancellor, Rachel Reeves, raises spending further in her 2025 Spending Review. If she raises spending and... 11th December 2024 · 3 mins read
UK Economics Update Tracking the MPC’s thinking with our Bank of England Caseometer Our new Bank of England Caseometer helps track whether the Bank is becoming more inclined to cut interest rates faster and further or slower and not as far. Our forecast is that rates will continue to... 10th December 2024 · 4 mins read
Global Economics Update US import tariffs: your questions answered We held an online session on US import tariffs on 26th November. (See a recording here ). In this Update we answer the questions we were most asked. 29th November 2024 · 7 mins read
UK Economics Update Pledge not to raise taxes may not survive contact with reality The Chancellor, Rachel Reeves, has confidently claimed that she will not be “coming back with more taxes”, but developments since the Budget have already whittled away her fiscal ‘headroom’. Further... 28th November 2024 · 5 mins read
Global Economics Update Canada, China and Mexico in Trump’s firing line President-elect Donald Trump’s first threatened tariffs since the election are designed to extract concessions on drug trafficking and illegal border crossings, which means it may be possible for the... 26th November 2024 · 4 mins read
Event Drop-In: The Fed, ECB and BoE December meetings and the 2025 policy outlook 1734620400 Our senior economists hosted an online briefing to discuss the final Fed, ECB and Bank of England decisions of 2024.
UK Economics Update Trump Tariffs, retaliation, concessions and trade deals The UK is not as exposed to US import tariffs as many other economies and we suspect any resulting reduction in UK GDP would be very small. That said, the car and pharmaceutical sectors are the most... 14th November 2024 · 9 mins read
Event Europe Drop-In: Germany's political crisis – Macro and market consequences 1731510000 Could the collapse of Germany’s ruling ‘traffic light’ coalition open the way to more effective governance for Europe’s largest economy?
UK Economics Update Budget means Bank of England won’t cut rates as fast and as far While cutting interest rates from 5.00% to 4.75% today, the Bank of England implied that the Budget means rates will continue to fall only gradually. We agree and due to the Budget (and not the US... 7th November 2024 · 3 mins read
Bonds & Equities How worrying is the surge in Gilt yields? While the market fallout from yesterday’s UK budget announcement is still a very long way from the 2022 “mini-budget” debacle, the surge in Gilt yields and fall in sterling over the past couple of... 31st October 2024 · 5 mins read
UK Economics Update Credit conditions still consistent with the economy growing The Bank of England’s Q3 Credit Conditions Survey suggests house prices will rise further in Q4 and supports our view that a mild slowdown in GDP growth this year is more likely than another recession... 10th October 2024 · 2 mins read
UK Economics Update Trump tariffs may not be so bad for the UK One way the US election could influence the UK economy would be if Donald Trump won and delivered on his pledge to put a 10% tariff on UK exports being sent to the US. We suspect the impact on UK... 2nd October 2024 · 7 mins read
Global Economics Update What to expect as the loosening cycle really kicks off We held an online Drop-In session last week to discuss the likely pace and extent of interest rate cuts and their implications now that the US Fed has joined the party. (See a recording here.) This... 23rd September 2024 · 8 mins read
UK Economics Update BoE stresses rate cuts will be gradual, but rates may still fall to 3% By leaving interest rates at 5.00% the Bank of England showed it is more like the ECB than the Fed and will continue to cut interest rates gradually rather than rapidly. We expect only one more 25... 19th September 2024 · 3 mins read
UK Economics Update Will public sector pay rises drive up inflation? We don’t think the slew of inflation-busting public sector pay deals that have been agreed by the new government will prevent wage growth from slowing next year to the rates of 3.0-3.5% we think are... 21st August 2024 · 4 mins read
