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The slight fall in the GfK /NOP composite index of consumer confidence is likely to be a blip. With a sustained recovery in real wages underway and employment growth set to remain strong, consumers’ spirits should start to pick up again soon. … GfK/NOP …
19th December 2014
Whilst falling oil prices should give an immediate boost to consumers’ discretionary spending power and help to provide a source of festive cheer, rising employment and a strengthening recovery in real wages should ensure that the revival in consumer …
18th December 2014
“Black Friday” discounts provided a significant boost to November’s retail sales volumes. However, the underlying picture looks strong too and we remain optimistic on the prospects for retail spending over the coming year. … Retail Sales …
The minutes of December’s meeting indicated that the MPC remains focussed on the outlook for domestic price pressures. As such, the latest labour data showing that pay growth is building but productivity stalling suggest that Bank Rate is still likely to …
17th December 2014
The Bank of England’s stress tests highlight the progress that banks have made in strengthening their balance sheets over the last couple of years and suggest that credit supply is likely to pick up in 2015. … Stress tests suggest stronger recovery in …
16th December 2014
The Bank of England will publish the results of its latest stress test of UK banks this week. While we would not like to wager that all eight banks will pass this year’s tough assessment, the lifting of another source of regulatory uncertainty after a …
12th December 2014
The colossal downward revision to the OBR’s forecast for interest payments in the Autumn Statement highlighted that the amount of austerity needed to attain a budget surplus is very sensitive to financial market conditions. While gilt yields are unlikely …
While the reforms announced today to the Monetary Policy Committee’s (MPC’s) practices will improve the transparency of monetary policy, there is a risk that the potency of policy is undermined by the new set-up which could overwhelm the markets and media …
11th December 2014
While the trade deficit narrowed in October, we would caution against reading too much into this improvement. Trade data are very volatile and exporters look likely to struggle further over the coming months. Nonetheless, we remain optimistic on …
10th December 2014
October’s industrial production data provided further signs that UK manufacturers are struggling against a crippling combination of weak overseas demand and a strong pound. But lower oil prices should help to reinvigorate the recovery in time. … …
9th December 2014
November’s BRC Retail Sales Monitor provides more evidence that a combination of strong jobs growth, recovering pay growth and falling retail goods prices is invigorating the recovery in consumer spending in the crucial pre-Christmas period. … BRC …
While the Autumn Statement once again saw the Chancellor make the most of a poor hand, we remain concerned that many of his fiscal gambles are unlikely to fully pay off. To our minds, the assumptions that the recovery will become naturally tax-rich, that …
5th December 2014
The measures announced in the Autumn Statement should provide a slight boost to consumers’ incomes next year. However, the size of the giveaway is very small. Accordingly, the onus remains on growth in real wages and employment to keep the consumer …
4th December 2014
The independent Office for Budget Responsibility (OBR) presented the Chancellor with a fairly gloomy set of economic forecasts in the Autumn Statement. Whilst there are clearly a number of obstacles to the recovery, we do not think that the OBR’s …
At last, the UK’s real wage squeeze appears to be over. Annual growth in average weekly earnings excluding bonuses picked up from 1.2% to 1.8% in September and so exceeded the same month’s CPI inflation rate (of 1.2%) for the first time in five years. And …
Low inflation is likely to have meant that the MPC’s decision to keep Bank Rate at 0.5% this month was straightforward. And while signs that the recovery is maintaining its pace and pay growth is rising suggest that a majority to raise rates could be …
This was a budget in all but name – and a pre-election one at that. It was designed to be attractive to voters in the here and now, while not taking any risks with the public finances. … Autumn Statement 2014: Staying the …
3rd December 2014
November’s Markit /CIPS services PMI provided reassurance that the UK’s recovery has remained strong despite a weaker global environment and is still not causing overall price pressures to build. … CIPS/Markit Report on Services …
This checklist is intended to help clients keep track of the key measures and numbers announced during the Chancellor’s Autumn Statement at 12.30pm and to provide some instant context. Our more detailed Autumn Statement Preview , published on 27th …
Whilst the recent fall in oil prices seems unlikely to transform the pace of the UK’s economic recovery, it should provide a timely prop at a time when other sources of support appear to be fading. … Will lower oil prices turbocharge the economic …
2nd December 2014
While recent very slow growth in broad money and bank lending is not as alarming as it may initially seem, it should bolster the consensus view on the Monetary Policy Committee (MPC) that it is still too early to raise interest rates. … Monetary …
1st December 2014
October’s household borrowing figures confirmed that the sharp slowdown in housing demand has continued to weigh on mortgage approvals. However, we still think that the current weak patch in mortgage lending should prove to be fleeting. … Household …
November’s Markit/CIPS manufacturing survey signalled that strong domestic demand is ensuring that the sector’s recovery does not grind to a halt in response to weak overseas demand. Moreover, falls in oil prices should provide a timely fillip to growth. …
While the rumour mill has been fairly silent, the Chancellor is surely piecing together a small package of measures for his Autumn Statement to provide a pre-election boost to households’ finances. A rise in the threshold for the 3% stamp duty rate and – …
28th November 2014
The GfK/NOP composite index of consumer confidence held steady in November and so continues to point to strong growth in household spending. What’s more, a gradual recovery in real pay and employment should mean that confidence levels remain high over the …
While the dovish tone of the November Inflation Report suggested that the Monetary Policy Committee (MPC) is likely to keep Bank Rate on hold for a few more months, the case for starting the process of ‘normalising’ monetary policy looks set to gradually …
George Osborne will present his fifth Autumn Statement on 3rd December under mounting pressure from his fiscal and opinion poll deficits. Despite this, he seems unlikely to panic and abandon his tough fiscal stance to fund pre-election giveaways and …
27th November 2014
The CBI Distributive Trades Survey provided another encouraging sign that retail sales have grown strongly Q4, despite unseasonably warm weather earlier this quarter. What’s more, the prospects look bright for consumer spending over the coming months. … …
26th November 2014
The second estimate of Q3 GDP indicated that the end of the squeeze on real pay is helping consumers to drive the overall recovery. What’s more, the prospects look bright for continued strong growth over the next few years. … GDP Second Estimate …
Recent outright falls in commodity, import, producer and retail prices should provide a timely fillip to households and firms. However, with CPI inflation already well below target and set to fall to its lowest rate in over 12 years over the next few …
21st November 2014
With less than six months to go until the general election, opinion polls suggest that another hung parliament is likely. But the state of the economy next May still has the potential to change the result. And in turn, the outcome of this election looks …
The latest public borrowing figures showed that the economic recovery is still doing little to heal the public finances and so undermined the view that the books can be balanced through spending cuts alone. … Public Finances …
Prospects still look bright for further solid growth in consumer spending. Admittedly, weaker growth in house prices and the looming prospect of interest rate hikes may soon dampen consumers’ spirits. But a combination of low inflation, further strong …
20th November 2014
October’s retail sales figures provided an encouraging sign that a combination of further strong gains in employment and the end of the real wage squeeze is supporting the consumer recovery. … Retail Sales …
A combination of very low inflation, reviving growth in earnings and further robust jobs growth should ensure that households’ real disposable incomes grow in 2015 at their fastest annual rate since 2003. Accordingly, we think that the recovery in …
19th November 2014
The minutes of November’s MPC meeting struck a more balanced tone than last week’s Inflation Report and signalled that it might not take much stronger news on wages or growth for other members to join the two already voting to raise rates. … MPC Minutes …
The slight rise in CPI inflation in October should be a blip in its downward trend. Indeed, falling import and commodity prices look set to provide timely support to real incomes at a time when other sources of support for the recovery are fading. … …
18th November 2014
There have been suggestions in some quarters that the MPC’s new forecasts for strong growth, low unemployment and below-target inflation push the envelope of plausibility. However, the MPC is certainly not forecasting an unprecedented combination of …
14th November 2014
The recovery’s acceleration just as the pace of fiscal consolidation eased last year could suggest that GDP growth will slow sharply when the fiscal squeeze re-intensifies after the general election. But there are reasons to think that further austerity …
13th November 2014
The latest figures showing that annual growth in average earnings has only just begun to exceed inflation appear to understate the extent to which living standards are improving for most people. … Are real wages rising faster than the official figures …
12th November 2014
November’s Bank of England Inflation Report gave another strong indication that the Monetary Policy Committee (MPC) expects to keep interest rates on hold for a number of months yet and then increase them only very gradually thereafter. … Bank of …
The latest labour market data provided encouraging signs that the strength of the jobs recovery is finally starting to feed through to a sustained pick-up in real wages. … Labour Market Data …
October’s BRC Retail Sales Monitor might raise concerns that the consumer recovery is losing steam. However, the underlying picture is not as weak as it looks. … BRC Retail Sales Monitor …
11th November 2014
This week’s Inflation Report should confirm that the majority view on the Monetary Policy Committee remains that the economy is still some months away from justifying higher interest rates. Indeed, the Committee’s forecasts for both GDP growth and …
7th November 2014
September’s trade data provided further signs that the UK’s recovery remained distinctly domestic-led in the third quarter as exporters struggled to cope with the strong pound and weak external demand. … Trade …
The former Chancellor, Alistair Darling, recently suggested that PPI payments may be behind the strength of the consumer recovery. But the reality is that they have only provided a meagre boost to households’ incomes over recent years and are unlikely to …
6th November 2014
With inflation easing and uncertainty about the economic outlook growing, the MPC’s decision to keep Bank Rate at 0.5% looks set to be repeated for a few more months. And while the MPC will not wait to raise rates until price pressures build, it is …
September’s industrial production data confirmed that the weaker global backdrop and strong pound have held back the manufacturing sector’s recovery. However, robust domestic demand should ensure its recovery doesn’t grind to a halt. … Industrial …
Fears that the UK’s economic recovery is rapidly losing steam appear largely overblown. Admittedly, the Markit/CIPS Composite PMI, which weights together the headline indices for the manufacturing, construction and services sectors, weakened to a 17-month …
5th November 2014
Despite the weaker-than-expected tone of October’s Markit/CIPS services survey,the UK’s economic recovery looks unlikely to lose much steam in the fourth quarter. … CIPS Report on Services …
