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December’s UK Markit/CIPS report on services suggested that the biggest part of the economy ended last year on a slightly weaker note. GDP growth in the fourth quarter should still have managed to edge up, but it is clear that interest rates will remain …
6th January 2016
Household borrowing figures for November provided further evidence that households continue to drive the UK recovery. However, in combination with household data published in December’s Q3 National Accounts, November’s figures are likely to have gained …
4th January 2016
While December’s Markit/CIPS manufacturing survey offers a glimmer of hope that the sector’s recession has drawn to a close, the improvement in the fourth quarter as a whole looks like it is built on shaky foundations and may prove to be short-lived. … …
The latest Quarterly National Accounts showed that the overall economic recovery was slower than previously thought in Q3, but that household spending remains robust. What’s more, looking ahead, the foundations are in place for further decent growth in …
23rd December 2015
The Quarterly National Accounts suggest that the economic recovery has less momentum than previously thought and still looks worryingly unbalanced. … National Accounts & Balance of Payments …
There was no festive cheer for the Chancellor in November’s public finances figures. Indeed, it now looks almost impossible for Mr. Osborne to meet the OBR’s public borrowing forecast for the fiscal year as a whole. … Public Finances …
22nd December 2015
The latest consumer confidence figures support our expectation that Q4 will have been another strong quarter for the consumer. But we anticipate that spending growth will wane a little next year as real wage growth moderates and fiscal austerity ramps up …
December’s CBI Distributive Trades Survey signals a fairly strong end to a strong quarter for retail sales growth. It also supports the view that last month’s weak survey reading was a blip, and not truly indicative of a slowing consumer recovery. … CBI …
21st December 2015
After a slight wobble in the autumn, the UK economy seems to be ending 2015 on a more positive note. Growth this year is on course to have been about 2.4%. While weaker than 2014’s 2.9% growth rate, this is still pretty respectable and broadly in line …
18th December 2015
The official measure of retail sales painted a rather more upbeat picture of high street spending in the early run-up to Christmas than the anecdotal evidence. The true picture probably lies somewhere inbetween. But crucially, households’ finances are in …
17th December 2015
The US Fed’s decision to finally press ahead and raise interest rates yesterday begged the question ofwhether the MPC will quickly follow suit. However, in the near term, the only British mention of “liftoff” is likely to be in relation to astronaut Tim …
The official UK retail sales figures painted a far more upbeat picture of high streetspending in the early run-up to Christmas than the anecdotal and survey evidence. … Retail Sales …
The latest labour market data showed a slowdown in wage growth, adding to evidence that there is no need for the MPC to follow the Fed in raising rates just yet. … Labour market data …
16th December 2015
The latest consumer prices figures confirmed that the UK’s brief flirt with deflation came to an end in November. But price pressures look set to remain subdued for a long while yet. Accordingly, the MPC is in no rush to follow the Fed in hiking rates. … …
15th December 2015
The unexpected slide in oil prices last week, to a six-year low of about $40pb, has left most forecasters once again pulling down their CPI inflation projections and has led some to speculate that this could delay the first rate hike. The fall in oil …
11th December 2015
November’s consumer prices figures look likely to show that the UK’s brief period of negative inflation has now come to an end. What’s more, although oil prices have fallen further in December, we think that inflation will continue to drift up over the …
The MPC’s decision to leave interest rates on hold again today highlights how the UK is set to tread the middle path between a loosening ECB and a tightening US Fed. A further fall in oil prices and a flattening in wage growth – which should keep …
10th December 2015
October’s dismal trade figures provided further signs that the economic recovery has remained worryingly unbalanced in the fourth quarter. And the prospects for exports further ahead remain pretty dim too. … Trade …
The Autumn Statement took the Conservatives’ planned path for departmental spending another stepcloser to Labour’s manifesto plans. Admittedly, the overall fiscal consolidation this parliament is set tobe bigger than the Conservatives planned before the …
9th December 2015
After a torrid year so far, October’s industrial production figures suggest that theUK manufacturing sector should end the year in better shape. … Industrial Production …
8th December 2015
The growing prevalence of Black Friday failed to provide much of a boost to retail sales in November. It appears sales were just shifted from the start to the end of November to take advantage of discounts. That said, looking though some of the …
There was much talk about the emerging “transatlantic divergence” last week. It now looks odds on that the US Fed will press ahead and raise interest rates later this month. Meanwhile, on the other side of the English Channel, the European Central Bank …
4th December 2015
The UK economy appears to be regaining a little momentum, but the nature of the recovery is looking quite unbalanced. The breakdown of Q3’s 0.5% quarterly rise in real GDP showed solid growth in domestic demand, but a 1.5 percentage point drag from net …
3rd December 2015
And so another year of rock bottom interest rates is set to pass us by. It is getting on for seven years since interest rates reached 0.5% and it is over eight years since we saw an interest rate rise. So will 2016 be the year in which rates finally rise? …
The improvement in the Markit/CIPS services survey in November reinforces our view that the economy will reverse its temporary slowdown seen in Q3 and offsets the slowing in the manufacturing and construction sectors. … Markit/CIPS Report on Services …
While monetary policy looks set to start moving in opposite directions in the US and euro-zone very soon, no change looks likely in the UK in the near future. Sterling is therefore likely to be caught in the crossfire, keeping the trade-weighted index …
2nd December 2015
Although the Chancellor is probably still running high from last week’s surprise windfall from the Office for Budget Responsibility (OBR) at the Autumn Statement, he should be wary. There are various ways which the new forecasts could prove too …
We got close to finally seeing some action from the Bank of England today. But in the event, the latest Financial Stability Report only prepped the ground for action from the Financial Policy Committee (FPC) further ahead. What’s more, it’s clear that the …
1st December 2015
The fall-back in the Markit/CIPS manufacturing survey in November shows that while there may be signs of improvement in the manufacturing sector, it still faces significant challenges. … Markit/CIPS Report on Manuf. …
Household borrowing figures for October demonstrated that households continue to drive the UK recovery. While the figures probably don’t have any implications for the interest rate outlook, they may add to the evidence on the need for macro-prudential …
30th November 2015
The Chancellor’s surprise windfall from the Office for Budget Responsibility (OBR) allowed him to do everything he wanted in last week’s Spending Review and Autumn Statement – and more. Indeed, it is rather peculiar how fiscal policy is being driven by …
27th November 2015
The second estimate of Q3 GDP confirmed that growth in the UK slowed and was relatively unbalanced. That said, we believe that this slowdown will be temporary but that these imbalanced may persist. … GDP: Second Estimate & Expenditure Breakdown …
We doubt that the fall in confidence in November is a sign that the pace of the consumer recovery is unwinding. The headline balance remains strong on a historical basis, and other elements of the GfK survey provided reassuring signs too. … UK Consumer …
We could finally see some policy action from the Bank of England next week – but not in the form of a tightening in monetary policy. The Financial Policy Committee (FPC) may flex its muscle by using some of its macroprudential tools to keep a check on the …
The measures announced in the Autumn Statement should provide a small boost to consumers’ incomes next year relative to the July Budget. But at just 0.2% of nominal income, it is unlikely to be transformative. And the big picture is still that the fiscal …
26th November 2015
This was a much more benign Autumn Statement than most had anticipated. Nonetheless, the big picture is still that austerity will renew in earnest next year – although we think that the economic recovery should be able to weather this relatively well. … …
25th November 2015
This checklist is intended to help clients keep track of the important measures and numbers announced during the Autumn Statement and Spending Review at 12.30pm and to provide some instant context. For a more detailed look at our expectations, please see …
Heavy discounting on the high street and online on Black Friday is likely to provide a bigger boost to spending this year than last. What’s more, the rise in real earnings, confidence and employment over the past twelve months should mean that spending …
24th November 2015
November’s CBI Distributive Trades Survey makes for somewhat disappointing reading. But mild weather and distortions related to Black Friday may have dragged on the headline figure, suggesting a bounce-back next month may be on the cards. … CBI …
Although the Chancellor will use his Autumn Statement on 25th November to soften the blow forhouseholds facing cuts in their tax credits, the big picture will still be that the economy faces a bigrenewed fiscal squeeze next year. But we are optimistic …
20th November 2015
The release of the UK and US inflation figures last week provided a reminder of why the MPC is likely to raise interest rates later than the US Fed. Inflation rates in both economies will pick up fairly notably over the next few months as previous sharp …
October’s public finance figures suggest that borrowing has not fallen as quickly as the OBR predicted, leaving the Chancellor with less room for manoeuvre in his Autumn Statement on 25th November. … Public Finances …
The underlying picture for household spending remains positive. Real household spending in Q3 looks likely to have grown by around 0.8% q/q, the rate seen in Q1 and Q2. And while retail sales volumes fell in October and private new car registrations were …
19th November 2015
UK retail spending fell slightly in October. But, more importantly, sales held onto most of the strong gain seen in September. … Retail Sales …
October’s -0.1% rate of CPI inflation could be the last we see of deflation for now, although we don’t think inflation will reach the 2% target until 2018. … Consumer Prices & Producer Prices …
17th November 2015
We have known for some time the Government’s broad objectives for its negotiations with the EU and David Cameron’s letter last week to the European Council President Donald Tusk contained little further detail. Perhaps the most notable development for the …
13th November 2015
After returning to negative territory in September, CPI inflation looks set to slip further below zero in October. While inflation looks odds on to post its lowest rate since March 1960, we do not think this decline will worry the MPC too much, with weak …
Labour market activity is still looking quite healthy. But the slowdown in wage growth in the latest figures confirmed that an interest rate rise is still some way off. … Labour market data …
11th November 2015
The significant fall in the BRC Retail Sales Monitor in October reflected temporary factors in both the current and previous months. The underlying picture is more positive, with support from solid real earnings growth, ultra-low interest rates and …
10th November 2015
Downgrades to the Bank of England’s inflation projections in its Inflation Report last week were widely anticipated. Nonetheless, sterling’s tumble against the dollar and the euro after its release suggests that the “Super Thursday” announcements from the …
6th November 2015
