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 Markets Markets mistaken on when and how BoE will tighten Our forecasts that the Bank of England won’t tighten monetary policy until much later than the markets expect and that when it does it will unwind some QE first (perhaps in 2024) before raising... 24th May 2021 · 12 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
UK Economics Labour Market (Mar./Apr.) Today’s data release suggests that the labour market is now on the front foot. Admittedly, the unemployment rate may still rise over the rest of this year. But this will probably be due to people re... 18th May 2021 · 2 mins read
UK Economics Rapid recovery and rising inflation risks The 2.1% m/m gain in GDP in March added to other evidence that the economy is recovering more rapidly from the COVID-19 crisis than even our above consensus view had suggested. As a result, we have... 14th May 2021 · 8 mins read
UK Economics GDP & International Trade (Mar. & Q1) The burst of growth in March shows that the recovery has been gathering momentum more quickly than we had thought and suggests that the risks to our forecast for the economy to return to its February... 12th May 2021 · 4 mins read
UK Economics Burst of reopening inflation will probably be temporary We suspect that a bout of inflation triggered by the economy reopening will be brief and that a more widespread and sustained rise in inflation that would concern the Monetary Policy Committee won’t... 11th May 2021 · 3 mins read
UK Economics Surge in pipeline price pressures an upside risk to inflation Supply issues have raised price pressures for producers, which they have begun to pass on. But with doubts around the reliability of survey evidence and the limited pass-through to consumer prices... 10th May 2021 · 4 mins read
UK Economics MPC more positive, but tighter policy still some way off While voting today to leave interest rates at +0.10% and the stock of Quantitative Easing (QE) at £895bn, the Monetary Policy Committee (MPC) suggested conditions for tighter policy may be in place in... 6th May 2021 · 4 mins read
UK Economics A wave of insolvencies is coming, but not a tsunami There will be a surge in business insolvencies once the government’s moratoriums expire at the end of June and September. But a strong economic recovery should ensure that fewer businesses go bust... 5th May 2021 · 4 mins read
