Filtered by Subscriptions: UK Economics Use setting UK Economics
Over the next few weeks, we will be publishing a series of pieces of work looking at the impact that leaving the EU would have on the UK economy, culminating in a presentation at our annual conference tour at the end of September. This Focus kicks things …
16th September 2015
The latest labour market statistics confirmed that the recent slowdown in the pace of the jobs recovery was only temporary. However, we don’t think that this will prompt the MPC to hike rates soon. … Labour market data …
Concerns have been mounting about the impact of the introduction of the National Living Wage (NLW) in April next year, with companies such as Next and Whitbread warning that they will have to put up prices to compensate for higher wage rates. We continue …
15th September 2015
UK inflation is still bouncing around zero and is likely to remain there for most of the rest of this year. This period of virtually no inflation is a good thing for the UK, as it is giving a welcome boost to households’ spending power. … Consumer Prices …
Even if the US Fed holds fire this week, US interest rates will be rising soon – and, in our view, quicker than markets expect. Turning points in UK monetary policy are often close to US ones. But there are good reasons, such as the bigger fiscal …
11th September 2015
We expect deflation to have returned in August; indeed, inflation is likely to remain below zero for most of the rest of this year. But it is not something to worry about as its main effect will be to boost households’ real incomes. … Deflation Watch: …
Although the MPC kept interest rates unchanged at 0.5% today, it left its options open – saying that recent events had not altered its central view for the UK economy, while conceding an increase in downside risks to global activity that merited …
10th September 2015
July’s industrial production and trade figures highlight that the strength of the pound and weakness in demand in key export markets held back the recovery in the manufacturing sector at the beginning of the third quarter. … Industrial Production & …
9th September 2015
On the face of it, August’s weak BRC Retail Sales Monitor may add to concerns that the economy has lost a bit of steam in the third quarter. However, the underlying picture is not as weak as it looks. … BRC Retail Sales Monitor …
8th September 2015
If the polls are anything to go by, left-leaning Jeremy Corbyn will be elected as the next leader of the Labour Party on 12 th of September. This has prompted a heated debate over his economic policies – so called “Corbynomics”. “People’s QE” in …
4th September 2015
The UK economy fired on all cylinders in Q2, with investment and net trade both providing considerable support to GDP growth. However, exports look set for a relapse soon. … Resurgence in exports unlikely to …
3rd September 2015
Last month’s MPC minutes and Inflation Report suggested that the Committee was in less of a hurry to raise rates than many had thought. And the recent market turmoil and commodity price falls are only likely to encourage the MPC to hold fire for a while …
The fall in August’s Markit/CIPS report on services will add to concerns about the sustainability of the recovery following the deterioration in the manufacturing survey already released. But we doubt the economy is on the cusp of a slowdown and the big …
July’s money and credit figures showed a further rise in lending to households and the housing market picking up pace. Even so, there is little to suggest that the strength in consumer spending has been founded on an unsustainable increase in credit. As …
1st September 2015
August’s Markit/CIPS report on manufacturing showed that the strong pound is crimping exporters and so suggests that the major support net trade provided to GDP growth in Q2 will be a blip. But there was better news on bank lending. … Markit/CIPS Report …
Turbulence in financial markets once again overshadowed some positive economic developments on the domestic front last week. Indeed, Q2’s second estimate of GDP showed that the recovery in household spending has maintained a healthy degree of momentum, …
28th August 2015
The second estimate of Q2 GDP showed that the recovery received considerable support from net trade. The pound’s recent appreciation suggests that this support is unlikely to last. But with households’ real incomes set to be boosted by another spell of …
The very strong reading of the GfK consumer confidence survey in August provides reassurance that recent softer growth in retail sales is likely to be just temporary. … GfK/NOP Consumer Confidence …
The upbeat tone of August’s CBI Distributive Trades Survey provided an encouragingsign that the consumer recovery has continued apace in Q3. And looking ahead, therecent fall in commodity prices should provide a further boost to spending. … CBI …
26th August 2015
Although the UK has clearly been caught up in the recent meltdown in global financial markets, we doubt that it will knock the economic recovery off course. That said, it provides the more cautious members of the MPC with another reason to hold fire on …
25th August 2015
The FTSE 100’s sharp decline last week, leaving it 10% below its peak in April, certainly won’t lift consumers’ spirits but it is unlikely to be large enough to dissuade them from continuing to spend more either. The relationship between equity prices and …
21st August 2015
July’s public borrowing figures showed that the public finances are now benefitingfully from the economic recovery’s strength. But at this early stage of the fiscal year,it is too soon to conclude that the second phase of the fiscal squeeze is going to …
July’s retail sales figures showed that the pace of spending growth on the high street moderated at the beginning of Q3. But we doubt that this signals a more widespread slowdown in the consumer recovery. … Retail Sales …
20th August 2015
The decline and underperformance of the FTSE 100 has not reflected building concerns about the UK’s economic outlook but rather the impact of recent events in China. The FTSE 100 is comprised to a greater extent than most other advanced economy benchmarks …
19th August 2015
The small rise in CPI inflation from 0% to 0.1% in July merely reflected the slightly earlier conclusion of summer discounting of clothing this year compared to last and so has little bearing on the likely timing of the first interest rate rise. …
18th August 2015
Headlines have recently been captured by last week’s shock move by the People’s Bank of China to lower the daily reference rate for the renminbi . However, we doubt that this will have much bearing on either the economic recovery, or the outlook for …
14th August 2015
CPI inflation probably held steady at zero in July, but the recent fall in oil prices suggests that the UK is likely to experience another bout of negative inflation before the end of the year. Meanwhile, domestic price pressures are still weak, …
The latest labour market figures supported the current consensus view on the Monetary Policy Committee that interest rates do not need to rise before the end of the year. … Labour market data …
12th August 2015
Strong growth in household spending this year will give way to a weaker performance in 2016. But this slowdown will not be severe and the medium-term outlook is bright. … Recovery unlikely to slow sharply next …
11th August 2015
This report is only available as a PDF. Click to download. … BRC Retail Sales Monitor (Jul.) …
Once again, the Monetary Policy Committee (MPC) surprised many by the extent of its downward revision to the inflation forecast in its latest Inflation Report and the Governor poured cold water on speculation that interest rates would rise before the end …
7th August 2015
The widening of the trade deficit in June is likely to be the start of a further deterioration in coming months, thanks to the stronger pound and the weakness of demand in the euro-zone. … Trade …
The ‘Super Thursday’ releases from the MPC suggested that an interest rate rise is still not imminent. The Committee wants to be cautious and wait for price pressures to emerge before pressing the lift-off button. So with a renewed period of deflation …
6th August 2015
June’s industrial production figures highlighted that the strong pound and weak overseas demand held back the manufacturing sector’s recovery in the second quarter. And the prospects for the rest of this year remain quite bleak. … Industrial Production …
The UK is heading for a renewed period of deflation. The fall back in oil prices to below $50 per barrel will bear down on petrol prices soon. In addition, sterling has continued to appreciate and on a trade-weighted basis it is now 18% higher than it was …
5th August 2015
The slight deterioration in July’s Markit/CIPS services survey is unlikely to dissuade two or three members of the Monetary Policy Committee (MPC) from voting to raise interest rates at this week’s meeting. … Markit/CIPS Report on Services (Jul.) & GDP …
July’s Markit/CIPS manufacturing survey suggested that the sector has struggled to regain traction at the start of Q3, after a poor showing in Q2. And the prospects for the industrial recovery over the rest of this year remain fairly bleak too. … …
3rd August 2015
Last week’s GDP figures indicated that the economic recovery has passed another milestone, namely that GDP per capita is now back to its pre-crisis levels. Admittedly, it has taken an extremely long time by past standards to reach this point. But …
31st July 2015
The GfK consumer confidence survey softened in July, but remained high by historical standards. This suggests that the consumer recovery still has plenty of momentum and that household spending should continue to grow solidly in the near term. … GfK/NOP …
This month’s MPC vote will probably be split for the first time this year. While only a minority will vote for a rate rise, the risk of a hike this year has risen. Indeed, Mark Carney will probably use the Inflation Report to continue to prepare …
30th July 2015
Despite softening a little, July’s CBI Distributive Trades Survey nonetheless remained robust and the big picture is that retail sales volumes still seem to be growing at a fairly healthy rate. … CBI Distributive Trades Survey …
29th July 2015
June’s money and credit figures showed a further pick-up in lending to households and the housing market recovery regaining some momentum. But there is little to suggest that consumers are embarking on a borrowing “binge”. As such, the Monetary Policy …
The first estimate of GDP in Q2 confirmed that the economic recovery got back on track after its slowdown at the start of the year. On the face of it, this could bring an interest rate rise closer, but we think that there is plenty of scope for the …
28th July 2015
July’s CBI Industrial Trends Survey provided more evidence that the strongerpound has snuffed out the recovery in the manufacturing sector. … CBI Industrial Trends Survey (Jul. & …
27th July 2015
The preliminary estimate of Q2 GDP on Tuesday looks set to show that the economic recovery has re-gained some momentum. However, the recent strength of the survey data has not been borne out fully in the official data that has already been released. …
24th July 2015
Households are continuing to see substantial increases in their purchasing power. Annual growth in average weekly earnings (excluding bonuses) picked up from 2.7% in April to 2.8% in May, well above the near zero rate of CPI inflation. What’s more, survey …
23rd July 2015
The weaker tone of June’s retail sales figures does not alter the big picture that the consumer recovery remains in full swing. And with the UK set to experience another period of “good” deflation, the prospects for the second half of this year are …
The minutes of July’s MPC meeting gave strong hints that at least a couple of members are on the brink of voting to raise Bank Rate. Undeniably, the probability of a 2015 rate rise has grown over the last month. But on balance, we still think that …
22nd July 2015
While June’s public finances brought less encouraging news on the pace of deficit reduction, there is no need for the Chancellor to panic yet. Indeed, robust growth in tax receipts suggests that the public finances are starting to feel the full benefits …
21st July 2015
Over the coming months, the economy will have to absorb both a renewed fiscal tightening and the first rise in interest rates since 2007. But the public sector cuts will now be phased in more gradually, while interest rates will rise at a slow pace. And …
20th July 2015
