UK Economics Update Drag on economic growth from credit starting to fade The Bank of England’s Q4 Credit Conditions Survey suggests the worst of the drag on economic growth from higher interest rates is fading. That suggests an economic recovery will begin later this year. 18th January 2024 · 2 mins read
FX Markets Update We think sterling has further to fall against the US dollar While sterling has outperformed other G10 currencies amid the dollar sell-off over the past couple of months, we expect it to reverse its gains against the greenback as short-term Gilt yields edge... 16th January 2024 · 2 mins read
UK Economics Update Resilience in business investment won't last We doubt the recent resilience of business investment in the face of higher interest rates will last. We think a drop back in business investment will contribute to the economy continuing to stagnate... 15th January 2024 · 5 mins read
UK Economics Update Loan defaults unlikely to hinder economic recovery The lagged effects of the weak economy and high interest rates may mean that loan default rates rise in the coming months. But the prospect of interest rate cuts later this year will mean they won’t... 10th January 2024 · 3 mins read
UK Economics Update New interest rate forecast – first cut sooner, end destination is 3% In a change to our previous forecast, we now think that the first interest rate cut from the Bank of England will happen in June this year rather than in November. We still think that interest rates... 3rd January 2024 · 6 mins read
UK Economics Update Few signs BoE is starting to contemplate rate cuts The Bank of England sprung no surprises, leaving interest rates at 5.25% for the third time in a row and pushing back against the prospect of near-term interest rate cuts. While the recent soft wage... 14th December 2023 · 4 mins read
UK Economics Update Lessons from 2023 and forecasts for 2024 Even though we expect the economy to be weaker than the consensus in 2024, we think that lingering constraints on domestic supply will prevent wage growth and services CPI inflation from falling quite... 7th December 2023 · 8 mins read
Global Economics Update Key risks for 2024 In this Global Economics Update, we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary... 30th November 2023 · 6 mins read
UK Economics Update Autumn Statement 2023 Checklist This is an updated checklist which takes into account our latest expectations for the Autumn Statement. The checklist helps clients keep track of the key policies and forecasts announced during the... 20th November 2023 · 3 mins read
UK Economics Update How worried should we be about wage growth? While wage growth will continue to slow, the smaller-than-expected fall in September supports our view that the Bank of England will keep rates on hold at their current level of 5.25% until late in... 14th November 2023 · 2 mins read
UK Economics Update BoE doubles down on signal that rate cuts are far away The Bank’s decision to leave interest rates at 5.25% for the second time in a row and to double down on the message that rates cuts are far away supports our view that rates will stay at 5.25% until... 2nd November 2023 · 4 mins read
UK Economics Update Weak housing market to squeeze spending and investment We suspect that more weakness in the housing market will weigh on real GDP by further reducing residential investment and consumer spending. This is one reason why we think the economy is close to a... 25th October 2023 · 4 mins read
UK Economics Update Higher r* - bigger fiscal challenge, headwind for real asset prices As our new higher estimate of the real neutral interest rate, or r*, for 2030 appears to be above the assumption priced into the financial markets, we think that in the 2030s 10-year gilt yields will... 19th October 2023 · 6 mins read
UK Economics Update Wage pressures have peaked, but may ease only gradually There is a growing body of evidence that suggests wage pressures are past their peak, but it’s not clear how quickly wage growth will slow. The gradual loosening in the labour market and the... 18th October 2023 · 4 mins read
UK Economics Update Households avoid mortgages as higher rates bite harder Higher interest rates weighed sharply on households’ demand for mortgages in Q3 and banks expect demand for mortgages to fall further in Q4. This is a clear sign that higher interest rates are working... 12th October 2023 · 3 mins read
Global Economics Update The bond market sell-off and the global economy The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous... 4th October 2023 · 6 mins read
