UK Economics Consumer Prices (Jul.) July’s drop in CPI inflation is likely to be followed by sharp rises in the next few months, taking inflation to a peak of about 4.5% by the end of the year. But provided the spike in inflation does... 18th August 2021 · 3 mins read
UK Economics Labour Market (Jun./Jul.) The latest batch of data brought signs that labour shortages are feeding through into higher pay growth in certain sectors. But underlying pay pressures were reasonably contained overall, and we... 17th August 2021 · 3 mins read
UK Economics June’s resilience won’t last as virus disruptions hit The 1.0% m/m rise in GDP in June was an impressive result. But we suspect that GDP growth in Q3 will be closer to 2.0% q/q than the 2.9% q/q forecast by the Bank of England. And we still think that... 13th August 2021 · 8 mins read
UK Economics GDP & International Trade (Jun. & Q2) The media headlines have focused on the big 4.8% q/q gain in GDP in Q2, following Q1’s 1.6% q/q fall. But the real news was the unexpectedly strong growth in June which suggested that the recovery... 12th August 2021 · 4 mins read
UK Economics Recovery becoming more tepid With a whopping 1.0 million people on average having been asked by the NHS App or Test & Trace system to self-isolate in July, the “pingdemic” is likely to have stifled the economic recovery in recent... 11th August 2021 · 9 mins read
UK Markets Economy and policy to provide a bit less support The recent downward revision to our GDP growth forecasts and the recent hawkish signs from the Bank of England which prompted us to bring forward our forecast of when monetary policy will be tightened... 9th August 2021 · 12 mins read
UK Economics Inflation expectations & pay growth key to policy tightening A bumper rise in utilities prices in October could contribute to CPI inflation climbing to a 10-year high of 4.4% in November. But as we don’t expect higher CPI inflation to feed through into higher... 3rd August 2021 · 5 mins read
UK Economics Divisions emerge, but early end to BoE’s asset purchases unlikely While the Bank of England will upgrade its near-term forecasts for inflation in its Monetary Policy Report (MPR) published on 5 th August, it will probably still judge that the rise is transitory. And... 29th July 2021 · 9 mins read
UK Economics Money & Credit (Jun.) The money and credit data showed that consumers were willing to take on more debt in June. However, with consumers accumulating excess savings at a faster pace, there were signs that the resurgence in... 29th July 2021 · 3 mins read
UK Economics Hit to GDP from pingdemic not huge, but unhelpful We estimate that the “pingdemic”, which has contributed to 1.1 million people self-isolating in the week ending 14 th July, could reduce monthly GDP by 0.5-1.0% and is surely exacerbating the current... 23rd July 2021 · 3 mins read
UK Economics IHS Markit/CIPS Flash PMIs (Jul.) The second consecutive decline in the flash composite PMI in July came as no surprise to us as we expected the pace of the economic recovery to naturally slow after the big gains following the... 23rd July 2021 · 3 mins read
UK Economics Retail Sales (Jun.) The underlying trend in retail sales volumes is a bit weaker than the 0.5% m/m rise in June suggests. And other evidence indicates that the resurgence in the virus and the “pingdemic” may have taken... 23rd July 2021 · 2 mins read
UK Economics Public Finances (Jun.) June’s public finances figures provided further evidence that the strong economic recovery is feeding through into lower government borrowing. So despite rising debt service costs, we still think that... 21st July 2021 · 3 mins read
UK Economics New BoE and gilt yield forecasts This week’s signs that two members of the Monetary Policy Committee have become more worried about the upside risks to inflation have led us to bring forward our forecast of when policy will be... 16th July 2021 · 7 mins read
UK Economics Labour Market (May/Jun.) May’s figures paint a picture of a labour market well on its way to recovery and will further fuel concerns about labour shortages and the possible boost to inflation from higher wage growth. But past... 15th July 2021 · 3 mins read
UK Economics Consumer Prices (Jun.) The rise in CPI inflation from 2.1% in May to 2.5% in June was smaller than the leap in US inflation to 5.4% released yesterday, but we think the gap between the two will shrink as inflation in the UK... 14th July 2021 · 3 mins read
