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
Global Economics Update What next after Credit Suisse? While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of... 20th March 2023 · 5 mins read
UK Economics Update Spring Budget 2023 Checklist This checklist helps clients keep track of the key forecasts announced during the Spring Budget at 12.30pm (GMT) on Wednesday 15 th March. Our more detailed preview is here. We will send a Rapid... 14th March 2023 · 3 mins read
UK Economics Update Mapping economic reforms for the UK The numerous “plans for growth” that have been announced by the Government, the Opposition, and various commentators in recent months vary in their analytical rigour but all miss one crucial point... 9th March 2023 · 7 mins read
UK Economics Update Profit margins another potential threat to inflation outlook A widening in profit margins could mean that inflation is slower to fall back to the Bank of England’s 2.0% target than we expect. That would cause the Bank to raise interest rates even further than... 28th February 2023 · 5 mins read
UK Economics Update Have households spent all their pandemic savings? There is mounting evidence that households have exhausted their stock of savings built up during the pandemic. That has supported real spending and cushioned the blow from the fall in real household... 22nd February 2023 · 4 mins read
UK Economics Update Comparing CE forecasts to the consensus Being ranked by the Sunday Times as the top UK economic forecaster for 2022 is a great accolade and has generated a lot of interest in what we expect to happen next. Our forecasts for 2023 imply a... 20th February 2023 · 5 mins read
UK Economics Update Pandemic recovery helped prevent recession The UK avoided a recession last year partly because of more spending by households on restaurants and trains and partly because of more investment by businesses in aircraft, cars and cruise ships... 16th February 2023 · 4 mins read
UK Economics Update Recession to trigger larger rise in insolvencies than the GFC We think business insolvencies may rise to a record high of around 8,400 per quarter by Q2 2024 and take until at least early 2025 to return to a more “normal” level of just over 4,000 per quarter... 9th February 2023 · 5 mins read
UK Economics Update Rates close to their peak, but cuts are far away While raising rates by 50 basis points (bps) today, from 3.50% to 4.00%, the Bank of England implied that rates are very close to their peak. We still think that rates may rise to 4.50%, but perhaps... 2nd February 2023 · 4 mins read
UK Economics Update The next phases for interest rates and the BoE’s possible guidance With interest rates nearing a peak, the next two phases of monetary policy will most probably be rates being held at that peak and then being cut. The Bank of England may soon provide some guidance on... 1st February 2023 · 8 mins read