UK Economics Update ILO be damned? The latest data highlighted a diverging trend between the two main measures of unemployment. Neither measure is perfect, but at least the claimant count is timelier than the ILO measure. Until the ILO... 17th June 2020 · 4 mins read
UK Economics Update Return of risk appetite to benefit UK assets A continued return of risk appetite as the economy slowly recovers from the coronavirus crisis will boost equities and the pound so long as there is a compromise on Brexit. But with the Bank of... 16th June 2020 · 3 mins read
UK Economics Update Brexit will hold back the recovery We assume that a slim trade deal will be agreed by the end of this year and that a big step change in the UK-EU relationship will be avoided. But with the chances of a “no extension, no Brexit deal”... 15th June 2020 · 8 mins read
UK Economics Update High business borrowing is the lesser of two evils The huge amount of borrowing undertaken by firms in the last three months is reassuring in the sense that businesses are getting the cash they need to make ends meet. But some firms won’t be able to... 11th June 2020 · 4 mins read
UK Economics Update Government to live with debt rather than lurch towards austerity Unlike the period after the Global Financial Crisis, we doubt that the government will immediately turn to a prolonged period of austerity after the surge in the debt to GDP ratio during the... 10th June 2020 · 5 mins read
UK Economics Update Will households spend their savings? The bulk of the leap in the saving rate will be reversed as the economy opens and people start spending again but the desire to hold more savings post-lockdown combined with lower incomes will weigh... 10th June 2020 · 3 mins read
UK Economics Update Furloughs prevent tsunami of layoffs, but second wave likely The government’s furlough scheme has prevented the UK economy from being engulfed by a tsunami-like first wave of unemployment. But a second wave will probably come once the reduction in the... 21st May 2020 · 3 mins read
UK Economics Update Pound taking a one-two punch from coronavirus and Brexit The recent weakness in the pound has been driven by renewed concerns about Brexit and the prospect that the Bank of England will have to cut interest rates below zero to support the economy. As a... 19th May 2020 · 3 mins read
UK Economics Update Fiscal costs of crisis may be greater than OBR predicts With the Office for Budget Responsibility’s government borrowing forecasts only including the cost of just one of the extra four months of the Job Retention Scheme and no medium-term scarring effects... 14th May 2020 · 3 mins read
UK Economics Update Bank of England unlikely to take rates negative We think it is far more likely that the Bank of England will use further rounds of Quantitative Easing to boost demand rather than cut interest rates into negative territory as the market is... 14th May 2020 · 3 mins read
UK Economics Update The next expansion in QE may not be the last While the Monetary Policy Committee left its interest rate and quantitative easing policies unchanged this morning, it implied that an expansion of QE is imminent. This leaves our existing call that... 7th May 2020 · 3 mins read
UK Economics Update BoE focus will shift from liquidity to monetary policy The Bank of England has been expanding its balance sheet during the coronavirus crisis mainly to fulfil its role of lender of last resort in a liquidity crisis. That will probably remain the focus for... 6th May 2020 · 4 mins read
UK Economics Update Bank loan losses to approach GFC levels We estimate that banks will have to absorb about £50bn of loan losses from corporate and household defaults as a result of the coronavirus crisis. If anything, the risks are for even bigger losses... 29th April 2020 · 3 mins read
UK Economics Update Length of lockdown and the implications for GDP With the reopening of the economy to be governed by the extent to which the coronavirus is brought under control and the burden being placed upon the NHS, there is still a lot of uncertainty about how... 29th April 2020 · 5 mins read
UK Economics Update What shape will the coronavirus recovery take? The shape of the economic recovery from the coronavirus crisis mainly depends on the spread of the virus, the effectiveness of the policy response and the extent to which consumers and businesses... 27th April 2020 · 5 mins read
UK Economics Update Economic loss from coronavirus on a par with GFC It has become clearer to us that the economic legacy of the coronavirus crisis will last a number of years. Our new forecast is that the economy will be about 5% smaller (£100bn) at the end of 2022... 14th April 2020 · 6 mins read
