UK Economics Update Weak economic news could yet stave off a rate hike With the economic outlook little clearer than when it last met, it was never that likely that the Monetary Policy Committee would act today. We still think that the chances of an interest rate rise in... 10th March 2011 · 1 min read
UK Economics Update How worrying is the rise in companies' price expectations? Concerns about the knock-on effects of the rise in inflation on inflation expectations tend to focus on the expectations of households and financial markets. But of most direct importance for the... 2nd March 2011 · 1 min read
UK Economics Update Monetary Indicators Monitor (Feb.) The MPC’s preferred measure of broad money growth has continued to accelerate and is now getting pretty close to the rates the Committee has been aiming for. However, we doubt that this growth can be... 1st March 2011 · 1 min read
UK Economics Update A strong recovery needs faster money growth The Monetary Policy Committee has suggested that nominal GDP growth can be sustained even if money growth remains weak. This might happen to some extent. But the big picture is that money growth at... 28th February 2011 · 1 min read
UK Economics Update How would a rate rise affect confidence? In this morning’s MPC minutes, the Committee voiced some concern about how a rate rise might affect consumer confidence. The relationship between interest rates and consumer confidence has weakened... 23rd February 2011 · 1 min read
UK Economics Update Fears of rising pay settlements overdone Tentative evidence of a rise in pay settlements has raised concerns that the much-feared wage-price spiral is kicking off. However, we remain sanguine about the outlook for pay growth and continue to... 21st February 2011 · 1 min read
UK Economics Update Funding problems to keep lid on bank lending The Chancellor is upping the pressure on banks to lend more. But with banks’ funding problems really coming home to roost this year, he might soon feel like he is banging his head against a brick wall... 14th February 2011 · 1 min read
UK Economics Update MPC should hold its nerve There had been little to suggest that the Committee had altered its view since the last meeting, so the no-change decision today was of little surprise. However, the next meeting – coinciding with May... 10th February 2011 · 1 min read
UK Economics Update Project Merlin no magic fix for bank lending We doubt that the lending commitments announced as part of today’s “Project Merlin” will lead to a significant pick-up in bank lending growth. 9th February 2011 · 1 min read
UK Economics Update Is the MPC acting asymmetrically? The MPC’s reluctance to raise interest rates despite persistently high inflation has led to accusations that it has been inconsistent in its treatment of its inflation target. However, there may be... 9th February 2011 · 1 min read
UK Economics Update Project Merlin no magic fix for bank lending We doubt that the lending commitments announced as part of today’s “Project Merlin” will lead to a significant pick-up in bank lending growth. 9th February 2011 · 1 min read
UK Economics Update How hard would a rate rise hit households? Perhaps the biggest risk facing the household sector is the possibility of a near-term interest rate rise. We do not think that a modest rate rise would have a disastrous effect on household incomes... 8th February 2011 · 1 min read
UK Economics Update Monetary Indicators Monitor (Jan.) Broad money growth is still exceptionally weak, adding credence to the view of the majority of those on the Monetary Policy Committee that inflation will fall back sharply in time. 1st February 2011 · 1 min read
UK Economics Update Fears of stagflation overdone Yesterday’s disappointing GDP figures re-ignited concerns about a return to so-called “stagflation” – the toxic combination of high inflation and high unemployment/weak economic growth that plagued... 26th January 2011 · 1 min read
UK Economics Update Oil prices another brake on the economic recovery The recent surge in the oil price to just shy of $100pb will act as yet another brake on the UK’s economic recovery this year just as the fiscal tightening is reaching its most intense phase. 18th January 2011 · 1 min read
UK Economics Update MPC not panicking yet The Monetary Policy Committee is coming under fire for leaving policy unchanged – as it did again today – in the face of rising near-term price pressures. But we doubt that the Committee has much to... 13th January 2011 · 1 min read
