UK Economics Update The link between the NHS waiting list and the labour market The long NHS waiting lists appear to be keeping people out of work and thereby contributing to inflation being higher in the UK than in other major economies. As the NHS waiting list is unlikely to... 5th July 2023 · 6 mins read
UK Economics Update BoE bares its teeth, but needs to bite harder The 50 basis point (bps) interest rate rise by the Bank of England today, from 4.50% to a near 15-year high of 5.00%, is unlikely to be the last hike given the UK’s higher and longer lasting inflation... 22nd June 2023 · 4 mins read
UK Economics Update How much scope is there for pre-election tax cuts? With less than a year and a half to go until the next general election, calls for the Chancellor, Jeremy Hunt, to cut a range of taxes have been growing. But recent economic developments mean the... 12th June 2023 · 4 mins read
UK Economics Update Why is the UK economy lagging behind? Many of the factors that explain the UK’s chronically weak GDP growth since the pandemic, such as the shrinking of the UK’s workforce and low export growth, won’t disappear any time soon. This... 6th June 2023 · 6 mins read
UK Economics Update Fall in job vacancies across sectors needs to go further The recent decline in the number of job vacancies suggests that the upward pressure on wage growth from labour shortages is probably past its peak. But it’s still not clear that wage growth will slow... 5th June 2023 · 4 mins read
UK Economics Update Recession postponed rather than cancelled Although the economy weathered the cost of living crisis much better than most expected, the full force of the cost of borrowing crunch has yet to be felt. And with it looking as though interest rates... 1st June 2023 · 6 mins read
UK Economics Update Targeted migration could help solve labour shortages While it is a hot political potato, well targeted migration could be one part of the solution to the UK’s labour shortages problem. That could help inflation and interest rates be lower than otherwise... 25th May 2023 · 3 mins read
UK Economics Update Higher interest rates for longer make a recession more likely The most troubling aspect of April’s inflation data, released earlier today, was evidence that price pressures are becoming increasingly domestically generated. Accordingly, we now expect the Bank of... 24th May 2023 · 3 mins read
UK Economics Update Labour activity and costs appear to be turning More convincing evidence of a loosening in the labour market and an easing in labour costs growth has started to emerge. It may not prevent the Bank of England from raising interest rate above 4.50%... 22nd May 2023 · 3 mins read
UK Economics Update If we’re not there already, the peak in interest rates is close Today’s 25 basis point rise in interest rates from 4.25% to 4.50% takes rates to our long-held forecast and may be the last hike, although one or two more hikes are possible. We suspect the subsequent... 11th May 2023 · 4 mins read
UK Economics Update Ingredients in place for lower food price inflation A combination of the falls in global agricultural commodity prices, energy prices and wage growth will soon drag down food CPI inflation from a 46-year high of 19.6% in March perhaps to around 4.5% by... 3rd May 2023 · 2 mins read
UK Economics Update Why is inflation higher in the UK? Inflation in the UK has stayed higher than elsewhere as the UK has endured the worst of both worlds – a big energy shock (like the euro-zone) and labour shortages (even worse than the US). Admittedly... 19th April 2023 · 3 mins read
UK Economics Update Credit conditions still consistent with weaker activity The fading effects of the mini-budget meant that bank lending conditions to households and businesses didn’t deteriorate any further in Q1. But the latest credit conditions survey doesn’t capture the... 13th April 2023 · 3 mins read
Climate Economics Update Voltaire would despair of the UK’s climate strategy The “ Powering up Britain” plan presented by the UK government this week highlights the benefits and limitations of official involvement in reducing emissions. On the one hand, the plans to reduce the... 31st March 2023 · 4 mins read
UK Economics Update No flight in bank deposits, but bank lending growth easing While households and businesses took further advantage of rising interest rates in February by moving money into bank accounts with higher rates, they are not withdrawing money from the overall... 30th March 2023 · 3 mins read
UK Economics Update Stronger data required for more rate hikes The Bank of England followed the Fed’s example by forging ahead today with a 25 basis point (bps) interest rate hike, taking rates from 4.00% to 4.25%. This could prove to be the last hike of the... 23rd March 2023 · 3 mins read
