UK Economics Money & Credit (Feb.) The leap in credit card borrowing in February and smaller increase in household savings could suggest that the cost of living crisis is already starting to bite. But we think it is more likely that... 29th March 2022 · 3 mins read
UK Economics Shift towards higher taxes and spending is here to stay Far from reducing the tax burden, the Chancellor is set to preside over the biggest tax share of GDP since 1949 under Clement Attlee's post-war Labour government. So if Rishi Sunak wants to be... 25th March 2022 · 5 mins read
UK Economics Retail Sales (Feb.) The small fall in retail sales in February probably had more to do with the shift back towards non-retail spending and the impact of Storm Eunice than it did the cost of living crisis. But, with... 25th March 2022 · 3 mins read
UK Economics S&P Global/CIPS Flash PMIs (Mar.) The surprisingly small fall in the composite activity PMI in March suggests that the war in Ukraine didn’t take that much steam out of the economy at the end of the first quarter. That said, the... 24th March 2022 · 3 mins read
UK Economics Spring Fiscal Statement 2022 Checklist We are resending this checklist so clients can have it to hand ahead of today’s Spring Statement. It is designed to help clients keep track of the key economic and public finances forecasts announced... 23rd March 2022 · 3 mins read
UK Economics Consumer Prices (Feb.) The further rise in CPI inflation from 5.5% in January to a new 30-year high of 6.2% in February adds to the pressure on the Chancellor to offset more of the cost of living crisis in today’s fiscal... 23rd March 2022 · 3 mins read
UK Economics Public Finances (Feb.) Notwithstanding the deterioration in the public finances in February, large revisions to the back data mean that borrowing in 2021/22 is on track to undershoot the OBR’s October 2021 forecast by a... 22nd March 2022 · 3 mins read
UK Economics Should the BoE fear the “stag” more than the “flation”? The Bank of England appears to be putting more weight on the “stag” part of the stagflationary consequences of the war in Ukraine than the “flation” part. But our forecast that the labour market will... 18th March 2022 · 8 mins read
UK Economics MPC becomes less hawkish, but rates may still rise to 2.00% Today’s 25bps hike takes interest rates up to the pre-pandemic and post-Global Financial Crisis high of 0.75% and, although the Monetary Policy Committee (MPC) sounded a bit less hawkish than it did... 17th March 2022 · 3 mins read
UK Economics Labour Market (Jan./Feb.) The further fall in the unemployment rate to within a whisker of the pre-pandemic rate will only encourage the Bank of England to raise interest rates on Thursday, probably from 0.50% to 0.75%... 15th March 2022 · 3 mins read
UK Economics GDP & International Trade (Jan.) The cost of living crisis and the influence of the war in Ukraine probably means that the 0.8% m/m leap in GDP in January is as good as it gets for this year. Meanwhile, two-thirds of the huge 20% m/m... 11th March 2022 · 4 mins read
UK Economics War won’t derail the MPC’s rate hiking plans The economic consequences of the war in Ukraine have worsened the already tricky mix between soaring inflation and slowing GDP growth. But we think the Monetary Policy Committee (MPC) is sufficiently... 10th March 2022 · 8 mins read
UK Economics The influence of the war on the UK economy The UK is not as exposed to the economic consequences of the war in Ukraine as the rest of Europe. Even so, in response to the surge in global commodity prices caused by the war we have dramatically... 9th March 2022 · 9 mins read
UK Economics New higher inflation forecasts and lower GDP forecasts In response to the news that the US is considering banning imports of Russian oil, which means that commodity prices will probably be higher for longer, we have raised our CPI inflation forecast and... 7th March 2022 · 6 mins read
UK Economics Flattening gilt yield curve another signal of weaker growth The 10-year/2-year gilt yield curve is closer to inverting than at any point since March 2020, supporting our view that GDP growth will slow this year. And while a yield curve inversion isn’t a good... 7th March 2022 · 3 mins read
UK Economics One week on, how has the war in Ukraine moved the dial? The further escalation of the war in Ukraine this week, which resulted in tighter economic sanctions on Russia and renewed surges in commodity prices, has increased the upside risks to inflation and... 4th March 2022 · 7 mins read
