UK Economics IHS Markit/CIPS Flash PMIs (Jun.) The fall in the flash composite PMI from a record high of 62.9 in May to 61.7 in June indicates that the pace of the recovery may have peaked. That suggests the monthly rises in GDP will ease back... 23rd June 2021 · 3 mins read
UK Economics BoE may unwind QE before hiking rates We think there’s a good chance that when the Bank of England’s Monetary Policy Committee starts to tighten monetary policy it will do it by unwinding some quantitative easing before it raises interest... 22nd June 2021 · 25 mins read
UK Economics Public Finances (May) May’s public finances figures suggest the strong economic recovery is starting to feed through into lower government borrowing. This reinforces our view that the tax hikes and spending cuts that most... 22nd June 2021 · 3 mins read
UK Economics Pay growth less inflationary than it looks, England v Scotland The recent jump in pay growth has mainly been driven by base and compositional effects and is therefore less inflationary than it appears at first glance. That’s one reason why we think inflation will... 18th June 2021 · 6 mins read
UK Economics Retail Sales (May) Rather than suggest the economic recovery is already spluttering, the decline in retail sales in May is probably just a result of the reopening of indoor hospitality in mid-May prompting households to... 18th June 2021 · 2 mins read
UK Economics No tightening until 2024, and then by unwinding QE first Even though the Monetary Policy Committee (MPC) will probably acknowledge in the policy announcement on Thursday 24th June that activity and inflation have been stronger than it expected, we don’t... 17th June 2021 · 8 mins read
UK Economics Consumer Prices (May) With businesses having raised their prices by more than we expected once they reopened after COVID-19 lockdowns ended, we now think CPI inflation will rise to a peak of 2.9% later this year compared... 16th June 2021 · 2 mins read
UK Economics Labour Market (Apr./May) Another strong set of labour market figures released this morning will feed concerns about labour shortages and the possible impact on inflation of higher wage growth. But the level of employment is... 15th June 2021 · 2 mins read
UK Economics Four-week delay to Freedom Day not a big blow to the economy A four-week delay to the easing of the final domestic COVID-19 restrictions beyond 21st June is unlikely to prevent the economy from climbing back to its pre-pandemic size by the autumn. And although... 14th June 2021 · 3 mins read
UK Economics Inflation fears, Euro 2020 hopes The mounting evidence that price pressures are rising is a threat to our forecast that CPI inflation won’t spend a long time above the 2% target until late in 2023. The good news, though, is that if... 11th June 2021 · 7 mins read
UK Economics GDP & International Trade (Apr.) The jump in GDP in April was another sign that consumers are raring to spend as the economy reopens. And all the early indicators suggest that GDP growth was strong in May as well. As such, our... 11th June 2021 · 4 mins read
UK Economics Public Finances (Apr.) April’s public finances figures showed that the government’s financial position isn’t as bad as the Office for Budget Responsibility predicted only two months ago, reinforcing our view that the tax... 25th May 2021 · 3 mins read
UK Economics BoE to unwind QE before it raises interest rates The rapid rebound in economic activity revealed by this week’s data releases has started to prompt some questions about when and how the Bank of England will tighten monetary policy. Our answers are... 21st May 2021 · 5 mins read
UK Economics IHS Markit/CIPS Flash PMIs (May) Another rise in the flash composite PMI from 60.7 in April to a record high of 62.0 in May points to the economic recovery shifting through the gears and picking up speed. That suggests the pace of... 21st May 2021 · 2 mins read
UK Economics Retail Sales (Apr.) The surge in retail sales volumes in April shows that households flooded back to the shops once they reopened in the middle of the month and suggests there is even some upside risk to our forecast... 21st May 2021 · 3 mins read
UK Economics Consumer Prices (Apr.) The jump in CPI inflation from 0.7% in March to 1.5% in April (consensus forecast 1.4%) was almost entirely driven by energy price effects, which will only be temporary. We doubt a sustained increase... 19th May 2021 · 3 mins read
