UK Economics Mixed messages, but BoE clear rates won’t rise far next year It is fair to say that the Bank of England’s communications on the timing of the first interest rate hike have been muddled. But the Bank has been much clearer in its warning to the financial markets... 5th November 2021 · 7 mins read
UK Economics Weekly The Budget, the cycle and the size of the state Now that the dust has settled, two key points on the Autumn Budget stand out to us. The first relates to the size of the state. The Chancellor claimed to be on a “moral mission” to limit the size of... 29th October 2021 · 4 mins read
UK Economics Fiscal policy back in focus The upward shift in investors’ interest rate expectations over the past month has been remarkable. While it is impossible to predict the timing of the first rate hike with any certainty, we have more... 22nd October 2021 · 4 mins read
UK Economics Weekly Closer to lift-off, but rates not going to the moon We still think it is more likely that the first hike in interest rates will come next year rather than this year. But irrespective of when it happens, the key point is that the subsequent pace of... 15th October 2021 · 9 mins read
UK Economics Good politics on wages meets bad economics The government’s plan to decrease the UK’s reliance on migrant labour in order to boost wages may be good politics, but it is not good economics. While labour shortages may push up wages in some... 8th October 2021 · 8 mins read
UK Economics Weekly Economy running on fumes There’s little doubt that the fuel crisis and the broadening product and labour shortages will slow the UK economy’s recovery. This comes at a time when the government is unwinding its fiscal policy... 1st October 2021 · 4 mins read
UK Economics Why we changed our mind on the BoE There were two key reasons behind our decision to forecast that the Bank of England will first raise interest rates in 2022 rather than in 2023. First, there is more evidence that the rise in... 24th September 2021 · 6 mins read
UK Economics Weak activity news likely to stave off rate hike On the back of the surge in inflation in August and the blistering increases in wholesale gas and electricity prices, investors and some economists have shifted their expectations of the first rate... 17th September 2021 · 6 mins read
UK Economics Economic recovery enters a more challenging phase The economy is entering a more challenging phase of its recovery from the pandemic as it is having to deal with another rise in COVID-19 cases and both product and labour shortages. We think the... 10th September 2021 · 7 mins read
UK Economics Weekly From not enough jobs to not enough workers It’s remarkable how quickly the fear keeping policymakers awake at night has shifted from there being too many people out of work to there not being enough people to fill all the vacant jobs... 3rd September 2021 · 7 mins read
UK Economics Weekly Shortages threatening to stifle the recovery The list of anecdotal reports of labour and product shortages has grown ever longer in the past week and pose two major risks to the economy. First, that the near-term recovery will be slower than we... 27th August 2021 · 4 mins read
UK Economics Weekly Inflation concerns, economy off to a bad start in Q3 The latest batch of labour market data will have done little to ease the Monetary Policy Committee’s (MPC) concerns that the coming rise in inflation could be sustained in 2022. But we are not... 20th August 2021 · 5 mins read
UK Economics June’s resilience won’t last as virus disruptions hit The 1.0% m/m rise in GDP in June was an impressive result. But we suspect that GDP growth in Q3 will be closer to 2.0% q/q than the 2.9% q/q forecast by the Bank of England. And we still think that... 13th August 2021 · 8 mins read
UK Economics Weekly What we learnt, and didn’t learn, from the BoE We learnt three things from this Thursday’s Bank of England policy decision and were left in the dark on two key issues. As a result, some of our forecasts for money market rates and gilt yields have... 6th August 2021 · 8 mins read
UK Economics Weekly At risk of stalling, but Q3 may make up for Q2’s weakness This week brought further signs that the “pingdemic” weighed on economic activity and evidence that in June, consumers amassed excess savings at a faster rate than in May. As a result, there’s clearly... 30th July 2021 · 3 mins read
UK Economics Hit to GDP from pingdemic not huge, but unhelpful We estimate that the “pingdemic”, which has contributed to 1.1 million people self-isolating in the week ending 14 th July, could reduce monthly GDP by 0.5-1.0% and is surely exacerbating the current... 23rd July 2021 · 3 mins read
