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Whilst the latest BRC Retail Sales Monitor was distorted somewhat by the early timing of Easter this year, it still offered encouraging signs that deflationary pressures on the high street are not causing consumers to defer their spending. … BRC Retail …
14th April 2015
The last few weeks have seen mixed messages on the health of the economic recovery, with the upbeat tone of the business surveys contrasting with initial official estimates of output in the first two months of 2015. Although the surveys certainly have …
10th April 2015
Tuesday’s inflation figures could well show that the UK entered deflation last month. But the fact that this mainly reflects lower energy prices makes it a good thing for the economy and there is no evidence yet that a more damaging, long-lasting period …
While February’s official industrial and construction figures suggest that GDP growth in Q1 may be disappointingly weak, we doubt that they signal that the economic recovery is now a busted flush. … Industrial Production & Construction Output …
The MPC left policy unchanged this month against a backdrop of looming deflation. The recent rise in the pound, weakening in the inflation outlook, softer US news and sharper planned government spending cuts suggest that interest rates will rise even more …
9th April 2015
February’s trade deficit came in worse than expected and will re-ignite fears that the strong pound and weakness in demand in the euro-zone is acting as a straightjacket on exporters. However, there are still some reasons to be optimistic. … Trade …
March’s UK Markit/CIPS report on services provided further reassurance that the economic recovery is still on a fast track despite the uncertainty created by the upcoming general election. … CIPS/Markit Report on Services …
8th April 2015
For a country that has spent most of its recent history enduring high inflation, the recent release of figures showing that CPI inflation in the UK has now fallen to zero was a watershed moment. What’s more, it looks odds on that March’s figures will show …
7th April 2015
Last week’s National Accounts showed that the economic recovery had plenty of wind in its sails in the fourth quarter. However, there remains one cloud hanging over the recovery which has yet to be blown away; namely, the current account deficit. Whilst …
3rd April 2015
We think that the deflation likely to be seen in the coming months will of the “good” sort, lasting only a short while and boosting households’ spending power. So we doubt that a rate cut – as floated by MPC member Andy Haldane – will be seen. That said, …
March’s UK CIPS/Markit report on manufacturing added to recent survey evidence suggesting that the sector’s recovery is picking up pace. … Markit/CIPS Report on Manuf. (Mar.) & Productivity …
2nd April 2015
The latest figures on households’ finances provided some further encouraging evidence that the consumer recovery rests on solid foundations. With real incomes set to rise robustly this year, and consumer confidence high, we can expect another strong year …
1st April 2015
The latest set of national accounts leave the economic recovery at the end of last year looking a bit stronger than before. We expect growth to remain robust this year, although the large current account deficit continues to cast a cloud over the UK’s …
The rise in the GfK /NOP composite index of consumer confidence to a 12-year high in March adds to other signs suggesting that households are poised to spend their windfall from lower energy prices. … GfK/NOP Consumer Confidence …
February’s household borrowing figures provided further confirmation that strong consumer spending is not the result of a borrowing binge. … Household Borrowing Monitor …
31st March 2015
The latest money and credit figures provided further evidence that the economic recovery is not fuelling an unsustainable pick-up in credit. … Monetary Indicators Monitor …
For a country that has spent much of its recent history battling high inflation, last week’s data showing that inflation hit zero in February was something of a watershed moment. However, we don’t think that this bolsters the case for an interest rate …
27th March 2015
The trend in retail sales growth still looks healthy and there are reasons to be optimistic that consumer spending will remain strong. Most importantly, inflation has fallen sharply and is now on the cusp of becoming deflation. Given that this is being …
26th March 2015
February’s retail sales figures suggested that the recovery in spending has got back on track, after a weak start to the year. What’s more, the prospects for the rest of the year remain bright. … Retail Sales …
With inflation hitting zero in February, the UK is on the cusp of deflation. But a brief period of gently falling prices driven by lower energy prices is nothing to be feared – in the UK, at least, deflation will be a good thing for the economy. … …
24th March 2015
In a Budget devoid of significant pre-election giveaways or major revisions to the economic forecasts, the most important changes were to the spending plans. While the Chancellor stuck to his overall spending figures for the next few years, he was able to …
20th March 2015
Tuesday’s inflation figures are likely to show the UK taking another step further towards deflation. And the recent rise in the pound will put additional downward pressure on inflation further ahead. But deflation in the UK is unlikely to last long and …
While the public finances have finally shown significant improvement in recent months, they have not lessened the need for a major re-intensification of the fiscal squeeze soon after the election. … Public Finances …
Whilst there were a few sweeteners for households in this year’s Budget, the boost to households’ incomes in the near term was meagre. Accordingly, it is strong consumer confidence, rising real wages and a recovering jobs market which will be the main …
19th March 2015
This was a budget designed to bolster the Government’s reputation for sound economic management and to make Labour’s plans for a looser fiscal stance look irresponsible. In 2015/16, the sum total of the Chancellor’s measures actually raised a small amount …
18th March 2015
The latest labour market figures were a bit disappointing, but there was enough good news for the Chancellor to trumpet in his Budget later today. Meanwhile, the latest MPC minutes echoed Governor Mark Carney’s comments earlier this week that the rise in …
This checklist is intended to help clients keep track of the important measures and numbers announced during the Budget at 12.30pm and to provide some instant context. For a more detailed look at our expectations for today’s Budget, please see our UK …
The pension reforms that come into effect next month create the potential for tens of billions of pounds to be transferred out of pension funds and into the wider economy. The actual amount that will be withdrawn and spent will probably only be a small …
13th March 2015
Sterling remains vulnerable to concerns about a hung parliament, EU exit and the current account deficit. But it is hard to tell when these concerns will bite, if they will at all. And in the meantime, the immediate prospects for relative interest rates …
When the coalition came to power, it envisaged eradicating the black hole in the public finances within five years, paving the way for big handouts by the time of this election. With the job only half done, things have hardly worked out this way, but the …
12th March 2015
Following the substantial net trade boost to the economic recovery in Q4, January’s trade figures brought more good news on the economy’s rebalancing. But sterling’s recent strength suggests that the deficit is likely to deteriorate again before long. … …
The latest industrial production figures provided further disappointing signs that the sector’s recovery is struggling to re-gain momentum, after almost grinding to a halt in the fourth quarter. But prospects further ahead look a little brighter. … …
11th March 2015
If the fiscal squeeze had gone to plan, no more austerity would now be needed. The assumption that the recovery would be strong and tax-friendly was misplaced. The next government should be dealt a better hand, with stronger growth in nominal GDP – and …
10th March 2015
The latest BRC Retail Sales Monitor provided more evidence that the recovery in retail spending has lost some pace at the start of this year, after a stellar fourth quarter. But falling unemployment, rising real wages and strong consumer confidence should …
We doubt that the recent strength in net migration will be temporary. The recent rise has been primarily driven by increased immigration from Europe, reflecting its weak economy compared to the UK and the end of transitional limits on migrants from …
6th March 2015
The MPC’s decision to stand pat today – marking the 6 th anniversary of interest rates at their record low of 0.5% – looks set to repeated over the next few months while inflation hovers near zero. But by the summer, it should be clear that the UK’s …
5th March 2015
Households are considerably better off than they were just a year or two ago. Indeed, the so-called “misery index” – a sum of the prevailing inflation and unemployment rates – has halved over the last three years and looks set to fall this quarter to its …
4th March 2015
The slight deterioration in the headline activity balance of February’s CIPS/Markit report on services was a bit of a disappointment, but hardly a disaster. The general tone of the survey was actually quite positive, while there is plenty of other …
The latest money and credit figures indicated that the economic recovery is continuing to progress at a robust pace without leading to the rapid accumulation of debt. … Monetary Indicators Monitor …
2nd March 2015
January’s household borrowing figures added to other evidence suggesting that the recovery in housing market activity is starting to re-gain some momentum. … Household Borrowing Monitor …
The latest manufacturing and lending figures brought further encouragement that the economic recovery is regaining pace after late 2014’s soft patch. … Markit/CIPS Report on Manuf. (Feb.) & Mortgage Approvals …
One feature that the recovery has been lacking for a long time is a pick-up in exports. But last week’s GDP figures offered some encouragement that the much-anticipated rebalancing of the economy is finally getting underway. And there are a number of …
27th February 2015
The strong level of the GfK/NOP composite index of consumer confidence in February provides further reassurance that households are likely to spend rather than save the vast bulk of the proceeds from stronger growth in real earnings. … GfK/NOP Consumer …
The Monetary Policy Committee (MPC) voted unanimously to leave interest rates on hold in February and looks set to sit on its hands over the next few months as CPI inflation descends into negative territory. But by the summer, wage data should have …
26th February 2015
While the second estimate of Q4 GDP confirmed that the recovery lost some pace at the tail end of 2014, the new expenditure breakdown showed that the recovery has become better balanced, with net trade finally playing a role in growth. … GDP: Second …
With inflation set to turn negative during the busiest time of the year for pay bargaining, the MPC will be on red alert for any signs that deflation is having a knock-on effect on pay deals. Accordingly, this Focus lists the key settlements which are due …
25th February 2015
The FTSE 100’s close above its previous all-time high will no doubt be heralded as another milestone in the UK’s economic recovery. But the reality is that the index has underperformed many other overseas indices for some time and is no longer a …
24th February 2015
February’s CBI Distributive Trades Survey makes for somewhat disappointing reading. But with earnings growth picking up and lower energy prices providing a substantial windfall, the recovery in spending should be back on track soon. … CBI Distributive …
23rd February 2015
Although retail sales volumes were a whopping 5.4% higher in January than a year ago, this does not have the hallmarks of an unsustainable boom. The average price of retail purchases has fallen by about 3% over the same period (thanks mainly to lower …
20th February 2015
The latest inflation figures, showing CPI inflation easing to a record low of 0.3% in January, naturally took up most of the column inches last week. It was therefore easy to overlook the latest labour market evidence, which showed that the job market has …
