UK Economics Update Osborne’s windfall doesn’t change big picture The Government today agreed with the Bank of England to transfer to the Exchequer the excess cash held in the Bank’s quantitative easing (QE) facility. This will leave the published borrowing figures... 9th November 2012 · 1 min read
UK Economics Update Would missing the debt rule lose the UK its AAA rating? The European Commission this week added to warnings that the Chancellor might miss his target for debt as a share of GDP to be falling in 2015/16. One factor influencing whether Mr Osborne decides... 8th November 2012 · 1 min read
UK Economics Update MPC not out of firepower yet The MPC’s decision to leave policy on hold today would not have been an easy one and the vote could have been quite close. We think that more policy stimulus will be required in the coming months –... 8th November 2012 · 1 min read
UK Economics Update Child benefit cuts only part of accelerating fiscal squeeze About 1 million households are currently receiving a letter from HMRC setting out how much they will lose from child benefit reforms taking effect in January 2013. While the macroeconomic impact of... 7th November 2012 · 1 min read
UK Economics Update PPI payments still not a game-changer for spending outlook UK banks have now increased their provisions for compensation payments for mis-sold Payment Protection Insurance (PPI) policies to £15bn – equal to 1.5% of annual household incomes. However, we think... 5th November 2012 · 1 min read
UK Economics Update Funding for Lending Scheme - a double-edged sword? September’s relatively positive borrowing numbers provided tentative evidence that the Bank of England’s Funding for Lending Scheme (FLS) is reducing the cost and increasing the availability of credit... 30th October 2012 · 1 min read
UK Economics Update Household Borrowing Monitor (Sep.) The latest household borrowing indicators seemed to reinforce the positive news from last week’s GDP data. But in the face of continued declines in real pay, a pick-up in borrowing may be a symptom of... 29th October 2012 · 1 min read
UK Economics Update Monetary Indicators Monitor (Oct.) The acceleration in the MPC’s preferred measure of broad money growth supports the picture from the recent GDP figures that there has been an underlying improvement in the economy. This could help to... 29th October 2012 · 1 min read
UK Economics Update Is a helicopter drop the answer? A so-called “helicopter drop” of money is generally seen as the nuclear option which will boost the economy if all else fails. However, it is not necessarily the radical step that it might seem. 24th October 2012 · 1 min read
UK Economics Update How would markets respond to a broken debt rule? There is a significant chance that the Office for Budget Responsibility judges in the Autumn Statement that the Chancellor is likely to miss his secondary target for debt as a share of GDP to be... 22nd October 2012 · 1 min read
UK Economics Update Are the labour market statistics telling the real story? In explaining the UK’s ‘productivity puzzle’ – the conundrum of a dismal GDP performance combined with strong employment growth – one possibility is that the GDP figures are understating the actual... 17th October 2012 · 1 min read
UK Economics Update Business rate rises will become less painful Today’s consumer prices figures brought the news that RPI inflation in September – the rate which will be used to uprate business rates next April – was 2.6%. While this will be another chunky rise in... 16th October 2012 · 1 min read
UK Economics Update What will the MPC do as its gilts mature? At the start of next year, the MPC will have to decide what to do with those gilts purchased in its quantitative easing (QE) programme that are about to mature. We expect the Committee to maintain its... 16th October 2012 · 1 min read
UK Economics Update Sterling’s appreciation another positive for inflation outlook Tomorrow’s inflation figures could show CPI inflation falling below its target for the first time since November 2009. And we still see scope for inflation to fall further over the next year or two... 15th October 2012 · 1 min read
UK Economics Update Household incomes facing renewed squeeze This week has brought some bad news regarding the outlook for households’ disposable incomes. That said, the renewed rise in food and energy prices should be smaller and more short-lived than the... 12th October 2012 · 1 min read
UK Economics Update Bigger fiscal multipliers highlight case for rejigging cuts One of the most attention-grabbing aspects of the IMF’s latest World Economic Outlook is its new, bigger estimates of the impact of fiscal consolidations on economic growth. At the very least, this... 9th October 2012 · 1 min read
