UK Economics A wave of insolvencies is coming, but not a tsunami There will be a surge in business insolvencies once the government’s moratoriums expire at the end of June and September. But a strong economic recovery should ensure that fewer businesses go bust... 5th May 2021 · 4 mins read
UK Economics What is the MPC’s forward guidance telling us? When taken together, the Bank of England’s forward guidance and its economic forecasts imply that the Bank may not raise interest rates until late in 2023 at the earliest. That would be later than the... 27th April 2021 · 6 mins read
UK Economics Does it matter if the BoE ends QE before the Fed and ECB? Our expectation that the Bank of England will end quantitative easing (QE) sooner than the US Fed and the ECB is unlikely to mean that UK government bond yields rise much further than elsewhere or... 26th April 2021 · 5 mins read
UK Economics Bounce back in activity begins The early evidence supports our view that the reopening of non-essential retailers and outdoor drinking/dining venues last Monday marked the start of a rapid rebound in economic activity. 19th April 2021 · 3 mins read
UK Economics Update Will households spend the money they have saved? We’ve assumed households just go back to saving the same share of their income as they did before the crisis. That is enough to drive a rapid economic recovery. The upside risk is if households go... 31st March 2021 · 5 mins read
UK Economics Update Higher inflation to push up longer gilt yields Our forecast that the Bank of England will keep interest rates at +0.10% for a few more years and that, as a result, inflation will rise above the 2% target for a prolonged period is consistent with a... 23rd March 2021 · 4 mins read
UK Economics Update No pushback against higher gilt yields, but little prospect of rate hikes The Monetary Policy Committee did not follow in the ECB’s footsteps by stepping up the pace of its QE purchases. Instead, it echoed the message of the Fed by emphasising that rate hikes are still a... 18th March 2021 · 3 mins read
UK Economics Expiry of policy support won’t knock the recovery off course Extensions to many emergency support measures in the Budget, combined with the lockdown easing roadmap, leaves us with a clearer steer on the impact of the eventual withdrawal of government support... 16th March 2021 · 5 mins read
UK Economics Trade trauma is not all due to Brexit and will be temporary Brexit was not the only reason why exports and imports in January were so weak. COVID-19 and statistical breaks are also to blame. And it appears that a good chunk of these effects faded in February. 12th March 2021 · 3 mins read
UK Economics Which measure of government net debt is most useful? In last week’s Budget speech, the Chancellor referred to the lower “underlying” measure of government net debt rather than the higher “headline” measure. You’d be forgiven for thinking he did that... 10th March 2021 · 4 mins read
UK Economics Spring Budget 2021 Checklist We are resending this Budget Checklist so clients can have it to hand ahead of today’s Budget. It is designed to help clients keep track of the key economic and public finances forecasts announced... 3rd March 2021 · 3 mins read
UK Economics Spring Budget 2021 Checklist This checklist helps clients keep track of the key economic and public finances forecasts announced during the Chancellor’s Budget speech at 12.30pm on Wednesday 3rd March and to provide some instant... 1st March 2021 · 3 mins read
UK Economics Update Soaring earnings growth not as good as it looks The surge in average earnings growth to a ten-year high is not what it seems as it’s partly due to large numbers of lower-paid workers losing their jobs. As such, the upward pressure on inflation from... 25th February 2021 · 3 mins read
UK Economics Update Why we think the rally in sterling will continue The pound has performed better than all other G10 currencies so far in 2021 (see Chart 1), rising from $1.36 at the start of January to almost a three-year high of $1.41 now. We expect the strength of... 24th February 2021 · 2 mins read
UK Economics Update Roadmap leaves economy on course to recover rapidly We think that the government’s roadmap for easing England’s current COVID-19 lockdown will direct the economy back to its pre-pandemic size by Q1 2022. With the Chancellor and the Bank of England... 22nd February 2021 · 3 mins read
UK Economics Update Will QE start costing the government money? There are fears that, by making the government’s debt servicing costs more vulnerable to short-term rises in interest rates, quantitative easing (QE) is storing up trouble for when Bank Rate rises... 10th February 2021 · 7 mins read
