UK Economics Update Three possible shapes of a second wave We don’t think that the recent resurgence in the coronavirus in certain parts of the UK makes the economic outlook any weaker than we already thought. But more widespread outbreaks would either slow... 7th August 2020 · 3 mins read
UK Economics Update MPC’s words are much more dovish than its numbers The Monetary Policy Committee left its interest rate and quantitative easing policies unchanged today and its new projections appear to suggest that no further loosening is required. But its dovish... 6th August 2020 · 3 mins read
UK Economics Update Risk of the virus dealing a second blow to the economy A surge in new domestic coronavirus cases is the biggest downside risk to our forecast that it will take two years for the economy to return to its pre-crisis peak. It could mean that the recovery... 28th July 2020 · 3 mins read
UK Economics Update A better way to measure the recovery? A new type of recession requires new tools to measure it. It has become clear that the activity PMIs will be of little use in gauging the extent and pace of the recovery from the coronavirus crisis... 27th July 2020 · 3 mins read
UK Economics Update Key dates to watch as economy’s life support is removed The economy is on life support, but this can’t last forever. This Update highlights the key dates to watch as the policy support is phased out, in particular the end of the furlough scheme on 31st... 24th July 2020 · 5 mins read
UK Economics Update Recovery in business investment will lag the rest of the recovery The coronavirus crisis is a new type of recession, but all the normal reasons why business investment recovers slowly from downturns still apply and the uncertainty about Brexit is an additional drag... 23rd July 2020 · 3 mins read
UK Economics Update OBR’s fiscal warnings can be ignored…for now The Office for Budget Responsibility (OBR) today sent a clear message to the government that regardless of the speed of the recovery, the government debt to GDP ratio is on an unsustainable path. Even... 14th July 2020 · 3 mins read
UK Economics Update Chancellor triggers deflation One consequence of the new policies announced by the Chancellor last week is that the UK will soon enter a period of deflation. But this will be the good form of deflation, which is temporary, boosts... 13th July 2020 · 6 mins read
UK Economics Update BoE can push up the money supply but not inflation A surge in the money supply has piqued fears of a leap in inflation. But in our view, there is little chance that this expansion of the money supply, driven almost entirely by quantitative easing... 9th July 2020 · 4 mins read
UK Economics Update Fiscal support continues, austerity is not even on the horizon The £30bn (1.4% of GDP) of extra measures announced today by the Chancellor may go some way to speeding up the economic recovery from the coronavirus crisis and limiting the long-term hit to... 8th July 2020 · 4 mins read
UK Economics Update UK lagging behind in the recovery race Some indicators suggest the UK is lagging behind other countries in the race to recover from the coronavirus, and it faces some additional hurdles which could slow it down even more. That’s why we... 7th July 2020 · 3 mins read
UK Economics Update Unemployment set to rise further, but not as far as feared Given the success of the government’s job furlough scheme and the signs of a strong initial rebound in economic activity we now think that the unemployment rate will peak later, in June 2021 rather... 2nd July 2020 · 5 mins read
UK Economics Update Further fiscal stimulus to reduce risk of long-term scarring With further fiscal support likely to be unveiled at some point in the next few weeks, the government appears willing to sustain the fiscal stimulus into the years ahead rather than lurch towards... 29th June 2020 · 3 mins read
UK Economics Update Pepys, plagues and pubs If the behaviour of Samuel Pepys after the Great Plague of 1665/66 is anything to go by, then people will be willing to return to offices, shops, pubs and theatres surprisingly quickly once the... 22nd June 2020 · 6 mins read
UK Economics Update MPC will do more QE, eventually We think today’s Monetary Policy Committee decision to keep rates on hold at +0.10% and increase Quantitative Easing (QE) by £100bn is unlikely to be the last act of policy loosening. And while we... 18th June 2020 · 3 mins read
UK Economics Update The consensus is still too optimistic Other forecasters were slow to appreciate the depth of the recession. Since then, the consensus GDP forecast has been revised down close to our own. But we think other forecasters are still... 18th June 2020 · 2 mins read
