UK Economics Labour Market (Dec./Jan.) Employment has recouped the falls after the furlough scheme, the unemployment rate has fallen to pre-COVID levels, job vacancies are at a record high and wage growth is rising. That’s a recipe for... 15th February 2022 · 3 mins read
UK Economics GDP (Dec. & Q4) When combined with the CPI inflation rate of 5.4%, the 0.2% m/m fall in GDP in December meant that the economy experienced a taste of stagflation at the end of last year. As it was driven by the... 11th February 2022 · 4 mins read
UK Economics Household incomes taking a big hit We estimate that the leap in utility prices and hike in taxes on 1 st April will reduce real household disposable incomes over the next two years by a cumulative £80bn. The resulting 2.0% decline in... 10th February 2022 · 8 mins read
UK Economics Interest rates to peak at 2.0% We now think that Bank Rate will rise from 0.50% currently to 1.25% sooner than we previously thought. What’s more, we now expect three more 25 basis point rate rises in 2023, resulting in rates... 9th February 2022 · 7 mins read
UK Economics BoE may hike rates to 1.25% this year despite Sunak’s help While the decisions by the Bank of England to hike interest rates from 0.25% to 0.50% and to start reversing quantitative easing (QE) were both as expected, with four MPC members wanting to raise... 3rd February 2022 · 4 mins read
UK Economics Public Finances (Dec.) Stronger tax revenues were just enough to offset big rises in debt interest costs in December. But we don’t expect this to last: further rises in inflation will mean borrowing soon overshoots the OBR... 25th January 2022 · 3 mins read
UK Economics IHS Markit/CIPS Flash PMIs (Jan.) The third consecutive decline in the composite PMI indicates that the Omicron variant weighed further on activity in January. But the recent fall in COVID-19 cases, relaxation of restrictions and... 24th January 2022 · 3 mins read
UK Economics Economy less favourable for whoever’s in Number 10 Although it is hard to predict whether by the end of next week Boris Johnson’s reign as Prime Minister will be solidifying or crumbling, we know that whoever is in Number 10 over the next year will... 21st January 2022 · 6 mins read
UK Economics Retail Sales (Dec.) The fall in retail sales volumes in December was bigger than expected and supports our view that the Omicron outbreak in the run-up to Christmas may have dragged down GDP by 0.5% m/m, if not more. 21st January 2022 · 2 mins read
UK Economics Real wage squeeze unlikely to be a rerun of 2008-14 The looming squeeze on real wages means that the near-term outlook for consumption and GDP has weakened. That said, we don’t expect anything as bad as the squeeze in 2008-14. In fact, real household... 20th January 2022 · 4 mins read
UK Economics Consumer Prices (Dec.) After rising from 5.1% in November to 5.4% in December, CPI inflation is now further above the Bank of England’s target than at any point since the UK first adopted an inflation target in October 1992... 19th January 2022 · 3 mins read
UK Economics Labour Market (Nov./Dec.) The labour market appears to have tightened after the end of the furlough scheme and at the start of the Omicron wave. So even though real wages are now falling and will decline further, we still... 18th January 2022 · 3 mins read
UK Economics Ramifications could be bigger if PM stays than if he goes The growing uncertainty over the Prime Minister Boris Johnson's position is unlikely to dent economic activity. Arguably, though, if a leadership challenge is avoided or Boris Johnson wins it, the... 14th January 2022 · 7 mins read
UK Economics GDP & International Trade (Nov.) Although the effects of the Omicron COVID-19 wave will probably mean that the economy falls back below its pre-pandemic peak by January after having surpassed it for the first time in November, that... 14th January 2022 · 4 mins read
UK Economics Inflation won’t be the fiscal boon many assume While the general perception is that higher inflation is unambiguously good for the public finances, the reality is a bit more nuanced. The Chancellor will almost certainly be gifted with a lower... 12th January 2022 · 4 mins read
UK Economics Six key calls and three risks for the UK in 2022 Our new forecasts for 2022 envisage CPI inflation rising further than most expect to a peak of 7% and the Bank of England raising interest rates quicker, from 0.25% now to 1.25% by the end of the year... 6th January 2022 · 4 mins read
