UK Economics A catch-up on COVID Given the huge surge in cases throughout December, the COVID-19 situation is once again set to be the biggest determinant of the performance of the economy over the first few months of 2022. We aren’t... 5th January 2022 · 4 mins read
UK Economics GDP (Q3 2nd Estimate) Today’s release indicates the economy had a bit less momentum in Q3 than we had previously thought. And, with early signs the Omicron variant has hit activity, growth is sure to have slowed further in... 22nd December 2021 · 3 mins read
UK Economics Public Finances (Nov.) The rise in government borrowing in November suggests the public finances could be already starting to feel the strain from higher spending on NHS Test & Trace and booster vaccines. Now that tighter... 21st December 2021 · 3 mins read
UK Economics MPC begins lift-off but rates unlikely to soar The surprise hike in interest rates by the Bank of England today, from 0.10% to 0.25%, could just be a case of the Bank moving a bit quicker than expected, but the hawkish tone of the commentary... 16th December 2021 · 3 mins read
UK Economics IHS Markit/CIPS Flash PMIs (Dec.) The fall in the composite PMI in December doesn’t come as much of a surprise given the surge in cases of the Omicron variant of COVID-19. But it was much bigger than expected, and shows that caution... 16th December 2021 · 3 mins read
UK Economics Consumer Prices (Nov.) Inflation is close to being further above the target than at any point since the UK started targeting inflation in October 1992. This makes tomorrow’s interest rate decision look closer, but on... 15th December 2021 · 3 mins read
UK Economics December looking dismal, but lockdown the real risk Reports that the surge in Omicron COVID-19 cases is causing some people to stay away from work, schools, pubs and restaurants increases the downside risks to our December and January GDP forecasts... 14th December 2021 · 3 mins read
UK Economics Labour Market (Oct./Nov.) Even though the fallout after the furlough scheme was smaller and shorter than the Bank of England had feared, concerns over the deteriorating COVID-19 situation will probably prevent it from raising... 14th December 2021 · 3 mins read
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
