UK Economics Update Surveys signal a slide in the economy While some measures of optimism have been improving, the majority of the survey evidence suggests the economy is weakening and the chances of the mild recession we have been forecasting have increased... 4th October 2023 · 3 mins read
UK Economics Update Slower money growth shows higher rates are working The sharp slowdown in broad money growth since late last year suggests that higher interest rates are working by reducing households’ and firms’ demand for borrowing, which should lead to softer... 26th September 2023 · 5 mins read
UK Economics Update Interest rates are at their peak The surprise decision by the Bank of England to leave interest rates unchanged at 5.25% today probably means that rates are already at their peak. We think rates will stay at this peak of 5.25% for... 21st September 2023 · 4 mins read
Climate Economics Update Rishi Sunak draws his UK climate battle lines The news that UK Prime Minster Sunak is set to further dilute the government’s climate policies demonstrates that when the political going gets tough, climate policies are the first to fall by the... 20th September 2023 · 4 mins read
UK Economics Update Rise in oil prices not yet a big inflation risk The recent rise in oil prices to $90 per barrel means CPI inflation is likely to rise from 6.8% in July to 7.1% in August, but it won’t prevent inflation falling to the 2% target by the middle of next... 8th September 2023 · 4 mins read
Climate Economics Update Fiscal frugality collides with rising renewable costs The UK government’s failure to award any new offshore wind-power contracts in its latest procurement round ultimately stems from bean-counting stinginess and is nothing that a lot of extra government... 8th September 2023 · 4 mins read
Climate Economics Update Onshore wind policy U-turn doesn’t blow us away The relaxing of planning rules governing new onshore wind installations in England marks a shift away from the de facto ban that was put in place in 2015. But raising the bar for objections to land... 6th September 2023 · 5 mins read
UK Economics Update Growth upgrade suggests UK no longer such a laggard The news that the UK economy may now be 1.5% bigger than its Q4 2019 pre-pandemic size, rather than 0.2% smaller, suggests the economy has been much stronger than we previously thought. But with the... 1st September 2023 · 2 mins read
UK Economics Update Rise in gas prices could make the BoE’s task harder In an environment in which firms feel able to pass on higher energy costs in their selling prices, the latest leap in wholesale gas prices poses an upside risk to our forecast for core CPI inflation... 23rd August 2023 · 3 mins read
Climate Economics Update No ULEZ Please, We’re British Surveys show that most people in the UK want action to tackle climate change but many do not have the appetite to pay for it. And given that the fiscal firepower and political will to grease the... 14th August 2023 · 4 mins read
UK Economics Update Is the cost of living crisis coming to an end? With CPI inflation soon to fall below average earnings growth, the cost of living crisis appears to be coming to an end. But households won’t suddenly stop feeling the pinch. We suspect the level of... 7th August 2023 · 3 mins read
UK Economics Update Close to the summit, but rates to stay at the peak for a year Today’s 25 basis point (bps) rise in interest rates from 5.00% to 5.25% may be followed by another hike in September to a peak of 5.50%. But rates appear close to the summit. Even so, the Bank’s new... 3rd August 2023 · 3 mins read
UK Economics Update Higher Bank Rate forecast, but peak in sight Despite the softer tone of the CPI inflation data for June released earlier today, we have raised our forecast for the peak in Bank Rate. Rather than rise from 5.00% currently to a peak of 5.25%, we... 19th July 2023 · 3 mins read
UK Economics Update How heavily are interest rates weighing on GDP? Splitting real GDP growth into the sectors most and least sensitive to interest rates provides some tentative evidence that higher interest rates are starting to weigh a bit more heavily on real... 18th July 2023 · 6 mins read
UK Economics Update Banks rein in supply of credit, weaker demand will be next Rising interest rates have led lenders to rein in the supply of credit to households in Q2, but they haven’t yet curtailed demand. That said, the latest credit conditions survey doesn’t capture the... 13th July 2023 · 4 mins read
UK Economics Update The economy and the next general election To the extent that economic conditions influence general elections, and of course they are not the be-all-and-end-all, the Prime Minister may want to wait as long as possible before going to the polls... 11th July 2023 · 3 mins read
