UK Economics The hit from “Plan B”, the MPC and better news on shortages The government’s recently-imposed “Plan B” COVID-19 restrictions mean there is a good chance that the economy contracted in December. If the pressure on the NHS increases, restrictions might be... 10th December 2021 · 8 mins read
UK Economics GDP & International Trade (Oct.) The news that the economy was hardly growing at all before Omicron means it is touch-and-go whether it will grow a bit in December or shrink a bit. Against that background, we doubt the Bank of... 10th December 2021 · 4 mins read
UK Economics Omicron to stay MPC’s hand, but won’t prevent 2022 lift off We wouldn’t completely rule it out, but we no longer expect the Monetary Policy Committee (MPC) to raise interest rates from 0.10% on Thursday 16 th December. We now think rates will rise to 0.25% in... 9th December 2021 · 9 mins read
UK Economics Omicron may weaken activity but lift price pressures While the emergence of the Omicron COVID-19 variant has increased the downside risks to our GDP forecasts, it has arguably increased the upside risks to our CPI inflation forecasts. The... 7th December 2021 · 9 mins read
UK Economics Christmas parties, Omicron inflation risks, MPC’s dilemma Some tentative evidence may already be emerging that the Omicron COVID-19 variant may have softened economic activity. It’s less clear what it means for inflation and there’s a risk that it... 3rd December 2021 · 7 mins read
UK Economics Labour shortages to push up wages for a bit longer The latest data suggest that the upward pressure on wage growth from labour shortages has a bit further to run. Admittedly, the discovery of the Omicron variant has clouded the near-term outlook for... 30th November 2021 · 4 mins read
UK Economics Omicron – The risks to GDP and for the BoE The restrictions announced by the government on Saturday in response to the new Omicron COVID-19 variant increase the downside risks to our GDP forecasts and the chances that the Bank of England... 29th November 2021 · 4 mins read
UK Economics Money & Credit (Oct.) The rise in consumer credit in October adds to evidence that economic activity fared well at the start of Q4. But that no longer offers much comfort in light of the discovery of the new Omicron... 29th November 2021 · 3 mins read
UK Economics IHS Markit/CIPS Flash PMIs (Nov.) The composite activity PMIs hardly changed in November as the economy held up fairly well despite continued supply disruptions and shortages. Meanwhile, signs that price pressures continued to grow... 23rd November 2021 · 3 mins read
UK Economics What if we’re wrong on inflation? This week’s data releases have made us more confident that the Bank of England will raise interest rates in December. But our forecast that inflation will fall back sharply in 2022 underpins our view... 19th November 2021 · 5 mins read
UK Economics Retail Sales (Oct.) The rebound in retail sales in October adds to the evidence that activity held up well in October and will raise expectations that the Bank of England will hike interest rates from 0.10% to 0.25% in... 19th November 2021 · 2 mins read
UK Economics Public Finances (Oct.) The winding down of the furlough scheme helped to bring down public sector net borrowing in October. But we doubt that the public finances will get much help from faster GDP growth in the near term. 19th November 2021 · 3 mins read
UK Economics Labour Market (Sep./Oct.) This labour market release is the first of two before the Bank of England’s December policy meeting and it suggests that the labour market remained tight after the furlough scheme ended. If the story... 16th November 2021 · 3 mins read
UK Economics Troubled Brexit waters ahead With speculation rising that the UK will trigger Article 16 of the Northern Ireland Protocol, the big risk is that relations between the UK and the EU sour to such an extent that parts of the whole UK... 11th November 2021 · 7 mins read
UK Economics GDP (Sep. & Q3) The economy regained some momentum in September, but continued shortages and the drag on real incomes from higher utility prices probably mean it will soon fizzle out. That’s one reason why we doubt... 11th November 2021 · 4 mins read
UK Economics Inflation on the launchpad We’ve been warning for a while that CPI inflation would rise further than most people expect and have recently pushed our own forecast even higher. We now think CPI inflation will rise from 3.1% in... 10th November 2021 · 9 mins read
