UK Economics Weekly Prime Minister Liz Truss falls, political risk premium remains We do not yet know which of the three PM hopefuls (Boris Johnson, Rishi Sunak, Penny Mordaunt who have attracted early backing from Conservative MPs) will replace Liz Truss. Whoever is PM, we think a... 21st October 2022 · 5 mins read
UK Economics Weekly Fiscal crisis to market crisis to political crisis The sacking of the Chancellor and the U-turn on corporation tax might not be enough for the government to regain the full confidence of the financial markets. For that to happen, more may need to be... 14th October 2022 · 9 mins read
UK Economics Weekly Three possible flashpoints for the markets The end of the Bank of England’s gilt purchases (14 th October), the publication of the Chancellor’s Medium-term Fiscal Plan (perhaps late this month) and the Bank of England’s next monetary policy... 7th October 2022 · 10 mins read
UK Economics Weekly Five ways the gov’t-induced turmoil has altered our thinking We don’t know yet if the PM and Chancellor installed just three weeks ago will survive the crisis. But the legacy of the Chancellor’s mini-budget on 23 rd September and the resulting events of this... 30th September 2022 · 5 mins read
UK Economics Weekly Kwarteng causes carnage The surge in gilt yields and the fall in the pound after the Chancellor announced his hefty tax cuts suggests that the markets have concluded the policies will lead to higher interest rates and more... 23rd September 2022 · 6 mins read
UK Economics Weekly Can the government hit a new 2.5% growth target? In his mini-Budget slated for next Friday, the new Chancellor reportedly intends to set an official target of raising real GDP growth to 2.5% a year. But with productivity growth and labour force... 16th September 2022 · 6 mins read
UK Economics Weekly Pound to fall further, but it’s not an EM currency Although the slump in the pound to $1.14 earlier this week took it to its lowest level since 1985, the suggestions that it is turning into an emerging market currency are misplaced. The key difference... 9th September 2022 · 10 mins read
UK Economics Weekly Businesses starting to feel the pain After having previously held up remarkably well, it appears that the prospect of much higher energy prices are now taking their toll on business confidence. The fall in confidence appears consistent... 2nd September 2022 · 5 mins read
UK Economics Weekly Government needs to step up to prevent deep recession The possibility of even bigger increases in the Ofgem utility price cap early next year means that the economy is facing down the barrel of a fairly deep recession. The depth of the recession... 26th August 2022 · 5 mins read
UK Economics Weekly Upward revision to market rate expectations overdone While we agree with investors that a 50 basis points (bps) interest rate hike on 15th September now looks increasingly likely, we think investors have gone too far in pricing in a further 200bps of... 19th August 2022 · 6 mins read
UK Economics Weekly Risk of a bigger and longer-lasting squeeze on real incomes The prospect of a bigger rise in utility prices in October and in the first half of 2023 means the risks to our forecast for CPI inflation to rise from June's 40-year high of 9.4% to a peak of 12.5%... 12th August 2022 · 8 mins read
UK Economics Weekly What the BoE told us and what it didn't We have been saying for some time that despite a recession, the Bank of England would be forced to raise interest rates. The Bank of England's signal that it is stepping up the fight against high... 5th August 2022 · 7 mins read
UK Economics Weekly Gilt yields to rebound, economics point a Lionesses win If our forecasts that Bank Rate will rise to 3.00% and that high inflation will prevent the Bank of England from cutting interest rates during the coming recession both prove right, then 10-year gilt... 29th July 2022 · 4 mins read
UK Economics Looser fiscal/tighter monetary mix whoever is the Prime Minister If members of the Monetary Policy Committee (MPC) had hoped that this week's data releases would provide a clear steer on whether to follow other major central banks and raise interest rates by at... 22nd July 2022 · 4 mins read
UK Economics The policies of the 5 wanting to be in Number 10 Even though the two candidates that are leading the race to be the next Prime Minister have pledged to loosen fiscal policy by less than the other candidates, whoever takes over as Prime Minister on 6... 15th July 2022 · 9 mins read
UK Economics Weekly Economy will give the next PM a rough ride The next Prime Minister may walk into 10 Downing Street while the economy is in the middle of a recession and just a month before a rise in CPI inflation to over 10% in October marks the worse point... 8th July 2022 · 7 mins read
