UK Economics Weekly Should we be worried by stagnating GDP? Today’s GDP release, which confirmed that the economy has hardly grown at all since March, is a blow for the government given its pledge to secure the “highest sustained growth in the G7”. We still... 15th November 2024 · 8 mins read
Event Europe Drop-In: Germany's political crisis – Macro and market consequences 1731510000 Could the collapse of Germany’s ruling ‘traffic light’ coalition open the way to more effective governance for Europe’s largest economy?
UK Economics Weekly Our new forecasts after the Budget and the US election We’ve revised up our forecasts for UK GDP growth, inflation and interest rates in response to the policies in the Budget. We have not changed our UK forecasts based on the results of the US election... 8th November 2024 · 8 mins read
UK Economics Weekly Is this Liz Truss 2.0? The market fallout from Wednesday’s Budget is a long way from the 2022 mini-budget episode. While we can’t completely rule out the possibility of rapid rises in gilt yields triggering a self... 1st November 2024 · 4 mins read
UK Economics Weekly The knowns and unknowns of the new fiscal rule The growing likelihood that the PSNFL measure of debt will form one of the Chancellor's fiscal rules in next Wednesday's Budget theoretically means she could increase borrowing by £73bn (2.3% of GDP)... 25th October 2024 · 4 mins read
UK Economics Weekly Does a £40bn “funding gap” mean £40bn of tax rises? The Chancellor’s £40bn “funding gap” doesn’t mean that the Budget on 30th October will involve £40bn of tax rises. Some of this “funding gap” will probably be paid for with higher borrowing and some... 18th October 2024 · 6 mins read
UK Economics Weekly Budget jitters The recent falls in business and consumer confidence are undoubtedly due to the prospect of higher taxes in the Budget on 30th October. And the probable boost to demand from more public investment... 11th October 2024 · 7 mins read
UK Economics Weekly Oil prices would need to jump further to influence BoE While the Bank of England is watching the developments in the Middle East “very closely”, Governor Andrew Bailey said that the Bank could start cutting interest rates more aggressively if the good... 4th October 2024 · 7 mins read
UK Economics Weekly The implications of more public investment A big increase in public investment in the Budget on 30th October would push up demand before any rise in supply is felt. That could mean over the next year or two inflation is a bit higher than... 27th September 2024 · 6 mins read
UK Economics Weekly The BoE won’t diverge from the Fed for long It makes sense to us that the Bank of England will continue to cut interest rates gradually as it has yet to follow the Fed by shifting from worrying less about inflation and worrying more about weak... 20th September 2024 · 5 mins read
UK Economics Weekly The fine line between delivering fiscal prudence and growth The Office for Budget Responsibility’s “Fiscal risks and sustainability report" showed that if left unchecked the public debt to GDP ratio would spiral from 98% now to 274% by the mid-2070s. But there... 13th September 2024 · 7 mins read
UK Economics Weekly Manufacturing recession possible, full recession unlikely We don’t think the lingering concerns about the health of the US economy mean that the chances of the UK economy slipping back into recession are much higher. Instead, the fading drag from higher... 6th September 2024 · 8 mins read
UK Economics Weekly Higher fuel duty wouldn’t reignite inflation In a week when the Prime Minister said that the coming Budget will be “painful”, we think there’s a growing chance that fuel duty will rise from next year for the first time since 2011. That will... 30th August 2024 · 4 mins read
UK Economics Weekly Inflation to stay above the 2% target for longer The 10% rise in the Ofgem utility price cap due to take effect on 1st October means that we now expect CPI inflation to rebound from 2.2% in July to 2.9% in November and not fall below 2.0% until June... 23rd August 2024 · 4 mins read
UK Economics Weekly Is the UK enjoying ‘Goldilocks’ conditions? The good news just kept coming this week. The economy grew at an above-trend rate for the second quarter in a row in Q2, the unemployment rate fell to 4.2%. At 2.2%, CPI inflation is only a touch... 16th August 2024 · 6 mins read
UK Economics Weekly Strong rebound in housing activity an upside risk to GDP Our forecast implies that the recovery in the housing market will both directly and indirectly add about 0.8% to the level of GDP by the end of 2026. But the risk is that the housing market rebound is... 9th August 2024 · 11 mins read
