UK Economics Update Bank eases off the brakes, but may not halt hikes until 4.50% The Bank of England followed the Fed by slowing the pace of interest rate hikes from 75 basis points (bps) in November to 50bps hike today as widely expected, which took rates from 3.00% to 3.50%. But... 15th December 2022 · 4 mins read
UK Economics Update Strikes won’t reduce activity in December by much The strikes in December won’t help the economy when it is probably already in recession. But we think real GDP may only be around 0.0-0.5% lower in December than otherwise. More important may be... 15th December 2022 · 3 mins read
UK Economics Update Have we hit peak inflation? There is a good chance that CPI inflation has peaked or will peak before the end of the year. There are even some signs that inflation is becoming less persistent. This may contribute to the Bank of... 2nd December 2022 · 4 mins read
UK Economics Update BoE losses add pressure on the public finances The Treasury has started to make payments to the Bank of England’s Asset Purchase Facility (APF) to cover the losses it has racked up because of the Bank of England’s gilt purchases. While this won’t... 25th November 2022 · 6 mins read
UK Economics Update Revising down peak Bank Rate from 5.00% to 4.50% With fiscal policy no longer expected to be ultra-loose and some signs emerging that domestic price pressures will ease further ahead, we no longer expect the Bank of England to raise interest rates... 23rd November 2022 · 4 mins read
UK Economics Update Autumn Statement 2022 Checklist We are resending this checklist so clients can have it to hand ahead of today’s Autumn Statement at 11.30am GMT. This checklist helps clients keep track of the key economic and public finances... 16th November 2022 · 2 mins read
UK Economics Update Joining the 75bps club, but strong signal rates won’t rise to 5.25% Although the Monetary Policy Committee raised interest rates today by 75 basis points, from 2.25% to a 14-year high of 3.00%, it sent the strongest signal yet that it thinks rates won’t need to rise... 3rd November 2022 · 4 mins read
UK Economics Update The race for PM and its implications for the economy Whichever way events unfold over the next few days, it seems clear the next Prime Minister (Rishi Sunak or Penny Mordaunt) will have to work hard to restore credibility in the eyes of the markets by... 24th October 2022 · 4 mins read
UK Housing Market Update Will property be a problem again? The UK property market has a long history of either causing or worsening recessions. But that history has taught both banks and regulators a lesson. So while higher debt payments, falling property... 19th October 2022 · 5 mins read
Global Economics Update From inflation crisis to financial crisis? Problems at California-based lender Silicon Valley Bank (SVB) have refocussed attention on financial sector risks. In light of this, we are resending a report from last October that provides a... 11th October 2022 · 5 mins read
UK Economics Update BoE’s gilt operations – easy to start, harder to end Given that the surge in gilt yields that has forced the Bank of England to intervene in the market was initially driven by the government’s loose fiscal policies, it makes sense that the Bank may not... 11th October 2022 · 8 mins read
UK Economics Update Higher interest rates to trigger a deeper recession If interest rates rise from 2.25% to 5.00%, as we now expect, we think the economy will suffer a deeper recession involving a 2% peak-to-trough fall in real GDP. That may result in the unemployment... 5th October 2022 · 4 mins read
Long Run Update Has the shift in fiscal policy altered the UK’s prospects? In view of the wider interest, we are also sending this Long Run Update to clients of our UK Economics Service. If the UK government’s “new era of fiscal policy” boosts GDP growth as planned, the UK’s... 30th September 2022 · 3 mins read
UK Economics Update Rates to rise to 5% to offset loose fiscal plans and low pound In response to the government’s loose fiscal plans and the resulting weakening in the pound, we now think that interest rates will rise from 2.25% now to a peak of 5.00% (4.00% previously). Rates at... 27th September 2022 · 6 mins read
UK Housing Market Update Market moves make house price falls inevitable In view of the wider interest, we are also sending this UK Housing Update to clients of our UK Economics service. The rise in market interest rates that has already happened will push up mortgage... 27th September 2022 · 3 mins read
UK Economics Update What’s needed to put public debt on a sustainable footing? Long-term fiscal sustainability is governed by what happens to a combination of economic growth, government borrowing costs and the primary budget balance. Since we’re sceptical that the tax cuts... 27th September 2022 · 5 mins read
