UK Economics Rising interest costs will add to the pain for households A rise in Bank Rate to a peak of 3.00% wouldn’t dent real consumer spending anywhere near as much as the drag from surging inflation over the coming quarters. That said, it would only compound the... 9th August 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 Public Finances (Jun.) June’s public finances figures provided more evidence that the government’s fiscal position is worse than the Office for Budget Responsibility (OBR) predicted back in March. This may limit the ability... 21st July 2022 · 3 mins read
UK Economics Consumer Prices (Jun.) There are some encouraging signs that the upward pressure on underlying inflation from global factors has started to ease. But as it is being replaced by stronger upward pressure from domestic factors... 20th July 2022 · 3 mins read
UK Economics Labour Market (May/Jun.) The strong rise in the supply of workers in May helped to take some of the heat out of the labour market. Even so, the sharp increase in employment and pick-up in wage growth supports our view that... 19th July 2022 · 3 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 Too soon to conclude inflation won’t become more persistent It’s too soon to conclude that the weak tone of this week’s news on activity means that inflation won’t become more persistent. Our proprietary measure of underlying/persistent CPI inflation rose to a... 24th June 2022 · 5 mins read
UK Economics Retail Sales (May) The fall in retail sales in May suggests that the decline in households’ real incomes from surging inflation is starting to hit consumer spending a bit harder. Even so, consumer spending appears to be... 24th June 2022 · 3 mins read
UK Economics S&P Global/CIPS Flash PMIs (Jun.) The fact that the composite PMI didn’t fall in June means the economy could be holding up a little better than we and the Bank of England had feared. Beneath the headline numbers, the survey also... 23rd June 2022 · 3 mins read
UK Economics Public Finances (May) The larger-than-expected rise in public borrowing in May is an early blow for the government on a day when it is expected to lose two by-elections. What’s more, the combination of a further weakening... 23rd June 2022 · 3 mins read
UK Economics Consumer Prices (May) The further rise in CPI inflation from 9.0% in April to a new 40-year high of 9.1% in May won’t prevent the Bank of England from raising interest rates further, but it may encourage it to opt again... 22nd June 2022 · 3 mins read
UK Economics Jubilee bank holiday makes life hard for the Bank of England By cutting GDP growth by about 0.3-0.4 percentage points (ppts) in Q2 and raising GDP growth by a similar amount in Q3, the impact of the extra bank holiday to mark the Queen’s Platinum Jubilee will... 21st June 2022 · 4 mins read
UK Economics BoE falling behind the Fed, but hints it may speed up By raising interest rates by 25bps (basis points) today, from 1.00% to 1.25%, rather than by 50bps or the 75bps the Fed announced last night, we think the Bank of England is putting too much weight on... 16th June 2022 · 3 mins read
UK Economics Labour Market (Apr./May) The tentative evidence that the recent weakening in economic activity is filtering through into a slightly looser labour market may push the Bank of England a little closer to raising interest rates... 14th June 2022 · 3 mins read
UK Economics GDP (Apr.) The 0.3% m/m fall in real GDP in April wasn’t as weak as it looks, but it nonetheless increases the chances that the economy is slipping into recession. While this is unlikely to prevent the Bank of... 13th June 2022 · 4 mins read
UK Economics Boris using the economy to fight back, BoE to hike by 50bps By deploying economic policies and Brexit battles in the fight for his political life, Boris Johnson is inadvertently asking the Bank of England to work harder to quash inflation. As it happens, we... 10th June 2022 · 9 mins read
