UK Economics Joining the 50bps club The further tightening in the labour market, the additional loosening in fiscal policy and more evidence that the weaker activity outlook is not reducing price and wage expectations lead us to believe... 9th June 2022 · 10 mins read
UK Economics Activity holding up and price pressures strengthening Real economic growth is slowing rather than collapsing in the face of the twin drags of higher inflation and rising interest rates. The Chancellor’s latest fiscal handout will help support GDP in the... 8th June 2022 · 9 mins read
UK Economics Risks to consumer spending forecast tilted to the downside April's money and credit data provide another reason to think that the consumer slowdown in April wasn't too severe. But it may take time for the cost of living squeeze to fully filter through into... 1st June 2022 · 3 mins read
UK Economics Money & Credit (Apr.) The solid rise in unsecured borrowing in April suggests that households have turned to credit to support their spending as the cost of living squeeze has intensified. But consumers do not yet appear... 31st May 2022 · 3 mins read
UK Economics What the Chancellor gives, the BoE will have to take away The new fiscal stimulus announced by the Chancellor this week puts more pressure on the Bank of England to raise interest rates into restrictive territory. As result of this and other recent... 27th May 2022 · 4 mins read
UK Economics Chancellor supports household incomes, but boosts inflation The extra financial support for households announced by the Chancellor today will help millions of households cope better with the cost of living crisis. But it won’t relieve all the pain and may mean... 26th May 2022 · 3 mins read
UK Economics S&P Global/CIPS Flash PMIs (May) The flash PMI survey for May suggests that economic growth has slowed to a crawl and that the risk of a recession has not gone away. Even so, weakness in the economy doesn’t seem to be filtering into... 24th May 2022 · 3 mins read
UK Economics Public Finances (Apr.) The economic wind that has recently been blowing the public finances to undershoot forecasts adds more pressure on the Chancellor to launch in the coming weeks a big package of measures to help... 24th May 2022 · 3 mins read
UK Economics Inflation to rise further and linger longer than in the US and EZ Not only did the surge in CPI inflation to 9.0% in April leave inflation in the UK above the rates in both the US and the euro-zone, but inflation in the UK will probably rise further and stay higher... 20th May 2022 · 6 mins read
UK Economics Retail Sales (Apr.) The unexpectedly strong rise in retail sales in April suggests the cost of living crisis hasn’t caused consumer spending to collapse and means the economy may have a little more momentum than we... 20th May 2022 · 3 mins read
UK Economics Weak confidence doesn’t make spending crash inevitable The recent collapse in consumer confidence to a near-record low has added to the probability that the UK experiences a recession this year. But households’ large stock of savings and the tightness in... 19th May 2022 · 3 mins read
UK Economics Consumer Prices (Apr.) If the rise in CPI inflation from 7.0% to a 40-year high of 9.0% in April wasn’t bad enough, inflation will probably rise further to 10% in October and will then fall back to the 2% target only slowly... 18th May 2022 · 3 mins read
UK Economics Can the economy handle interest rates of 3%? We estimate that a rise in Bank Rate from 0.10% last November to a peak of 3.00% would mean that GDP is around 2.0% lower than if Bank Rate had stayed at 0.10%. That is a smaller drag than the Bank of... 17th May 2022 · 5 mins read
UK Economics Labour Market (Mar./Apr.) Even though the economy contracted in March and may be on the brink of a recession, jobs growth strengthened, the unemployment rate fell to a 47-year low of 3.7% and wage growth accelerated. This... 17th May 2022 · 3 mins read
UK Economics Next Brexit bust-up risks adding to inflation The UK government’s plan to use domestic legislation to overwrite parts of the Brexit Northern Ireland Protocol risks creating another headwind for the economy and exacerbating price pressures at a... 16th May 2022 · 3 mins read
UK Economics Will the MPC still raise interest rates if there’s a recession? It looks as though the economy is halfway towards a recession. Although the Monetary Policy Committee has never raised interest rates during a recession before (the last time it happened was in 1975)... 13th May 2022 · 7 mins read
