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Growth of the broad money supply is still quite strong, but it is heading in the wrong direction. Meanwhile, the recent loosening of credit conditions has not fed through into a meaningful pick-up in bank lending yet. … Monetary Indicators Monitor …
30th January 2013
December’s household borrowing figures provided further evidence that the Funding for Lending Scheme (FLS) is having a beneficial impact on credit growth. Nonetheless, the recovery in lending is gradual and is coming from a very weak base. … Household …
While the economy may be entering a “triple-dip”, employment growth continues to be surprisingly strong. A look at which sectors are creating jobs suggests that part of the rise in employment reflects the extra effort needed to generate additional sales. …
29th January 2013
Between 2006 and 2012 London was probably the only UK region to experience a real rise in consumer spending, of perhaps 0.7% a year. This particularly reflected growth in the financial, professional and digital sectors, boosting employment and …
28th January 2013
With the Europe issue now kicked into the long grass of the next Parliament, politicians can hopefully get back to addressing the bigger issues affecting the economy at the moment. After all, EU speech aside, last week was a pretty dire one for the …
The UK economy is contracting again. Although Q4’s drop in GDP was partly down to temporary factors, another contraction in Q1 is quite possible, meaning that the UK may now be in a “triple dip”. And we think that the underlying stagnation is likely to …
25th January 2013
One rare bright spot in the consumer sector recently has been the pick-up in spending on cars. While cars comprise a relatively small part of overall consumer spending, this could still be promising for the wider consumer sector if it shows that …
Although indicating a modest slowdown in sales growth, January’s CBI Distributive Trades Survey still suggested that retailers enjoyed a reasonable level of activity in January. But signs of optimism are, justifiably, lacking. … CBI Distributive Trades …
24th January 2013
The minutes of January’s MPC meeting suggested that the views of its members are becoming increasingly polarised, indicating that next month’s decision over whether or not to provide the economy with more stimulus will be a close run thing. … MPC mins. …
23rd January 2013
The labour market appears to have found a second wind following earlier indications that its strength was fading. But the price for this resilience is very depressed earnings growth. … Labour Market Data …
January’s CBI Industrial Trends survey suggested that the conditions required for a sustained recovery in manufacturing output this year remain absent. … CBI Industrial Trends Survey (Jan. & …
22nd January 2013
December’s public finances data ended 2012 on a disappointing note. While the deficit in the last quarter of the fiscal year will be flattered by temporary factors, including the transfer of the Bank of England’s QE fund, this will only go so far to …
The UK’s relationship with the rest of Europe was the main topic of discussion last week. Perhaps the biggest danger is that the debate over Europe distracts politicians from getting on with taking further action to get the recovery going again. … Is the …
21st January 2013
2012 seems to have ended on a fairly underwhelming note with consumers relatively cautious over the festive period. … A lacklustre festive …
18th January 2013
December’s drop in the official measure of retail sales volumes confirmed that it was a fairly lacklustre festive period for the high street and provided more evidence that the UK has slipped into a “triple-dip”. … Retail Sales …
Concerns are building that sterling is on the brink of a sharp fall. While certainly possible, it is not as inevitable as some appear to assume. And it might not be such a bad thing in any case. … Sharp fall in the pound wouldn’t necessarily be a bad …
16th January 2013
Inflation held at 2.7% in December, marking the third full year of above-target price rises. Inflation is likely to stay close to this rate in the near-term, pushing real pay down further this year. But we still expect it to drop back further ahead. … …
15th January 2013
The key message from the high street since the start of the year is that the Christmas period turned out to be pretty lacklustre. Meanwhile, the Government last week published its mid-term review and its report card on the economic and fiscal front is …
14th January 2013
It is looking pretty clear that the festive period was fairly underwhelming in terms of overall sales for the retail sector. But what do the retailers’ updates tell us of winners, losers and other trends? … The themes of the festive trading …
11th January 2013
November’s disappointing UK industrial production and construction figures provided yet more evidence that the economy probably contracted in the fourth quarter of last year. … Industrial Production …
Although the Monetary Policy Committee (MPC) left policy on hold again today, we expect to see more quantitative easing (QE) this year, as well as a possible shift towards more radical options. … More QE still in prospect (Jan …
10th January 2013
Given that the National Statistician has decided not to alter the way RPI inflation is measured, the RPI rate will continue to run above the CPI measure for the foreseeable future. However, we still expect both to fall to relatively low rates next year as …
Following Friday’s disappointing results from the CIPS/Markit report on services, November’s trade data provided another reminder that the economy is likely to have contracted in the last quarter of 2012. … Trade …
9th January 2013
We think that Scotland’s exit from the Union would be unlikely to benefit the rest of the UK and could even represent a net economic cost. The UK would probably retain some of the disadvantages of current links with Scotland, including the need to …
8th January 2013
December’s BRC Retail Sales Monitor was in line with other evidence suggesting that retailers experienced a relatively flat festive season. With consumers’ real incomes still falling, the high street is facing a tough start to the new year. … BRC Retail …
The renewed pick-up in inflation and the tentative success of the Funding for Lending Scheme (FLS) mean that more quantitative easing (QE) does not look imminent. But if the economic stagnation continues as we expect, more asset purchases still look …
7th January 2013
The new year has got off to a generally positive start on the economic front. However, we wouldn’t get too excited. As we explained in our UK Quarterly Review published last week, we think that the UK economy will continue to flatline this year, with a …
Household borrowing continued to stagnate in November. While there are growing signs that the Bank of England’s Funding for Lending Scheme (FLS) is having a positive impact on borrowing costs, this is not yet translating into higher borrowing volumes. …
4th January 2013
The broad money supply is continuing to expand at a decent pace, but growth has been easing off. Meanwhile, bank lending remains weak although there is some indication of a loosening in credit conditions. … Monetary Indicators Monitor (Dec. …
December’s CIPS/Markit report on services broke the run of good news seen so far this new year and suggested that the economy still looks likely to have contracted in the final quarter of 2012. … CIPS/Markit Report on Services …
Building hopes of global economic recovery, the deterioration in the UK’s inflation outlook and growing fiscal worries have combined to push 10-year gilt yields above 2% today for the first time since May. Nonetheless, there remain good reasons to think …
3rd January 2013
The first news of the new year has been modestly encouraging. Nonetheless, it is hard to see where any meaningful growth will come from this year. We have cut our forecast for GDP growth this year from 0.5% to a meagre 0.2%. … Another year of stagnation …
The Bank of England’s latest Credit Conditions Survey provided further evidence that the positive impact of the Funding for Lending Scheme (FLS) is building. What’s more, the beneficial effects are spreading to the corporate, as well as mortgage, market. …
Over the past five years, the economy has been through three Rs: recession, recovery and relapse. It is hoped that 2013 will see the start of a fourth R, revival. However, we think that the economy will continue to flatline this year, with a meaningful …
2nd January 2013
Christmas trading on the high street appears to have been reasonable, but unspectacular. Following a difficult 2012, we do not have high hopes for retailers in 2013. In fact, consumer spending is likely to stagnate this year, although there will be some …
The further improvement in the CIPS manufacturing survey in December tentatively suggests that output in the industrial sector stabilised at the very end of last year. But 2013 still looks set to be another tough year for UK manufacturers. … CIPS/Markit …
The economy seems to be finishing 2012 on a pretty weak note, quite probably dropping into a “triple-dip” in the final quarter. The big picture is that the economy has been flatlining for over a year and we expect that stagnation to continue in 2013. … …
24th December 2012
GDP is still estimated to have risen strongly in Q3, but we already have plenty of evidence to suggest that the economy may have contracted in the fourth quarter. Indeed, the UK could already be in a “triple-dip”. We think that the economy will struggle …
21st December 2012
December’s sharp drop in consumer confidence suggested that November’s unexpectedly big rise was yet another false dawn. Along with the evidence from Wednesday’s CBI Distributive Trades survey of a sluggish start to spending in December, it looks like …
After a sluggish start to high street spending over the festive period, retailers appear to be losing their nerve and engaging in more widespread price discounting. And prospects for next year are not looking too good. … Retailers losing their …
20th December 2012
The unchanged level of retail sales volumes in November suggested that consumers are keeping their purse strings fairly tightly fastened in the run-up to Christmas. … Retail Sales …
December’s CBI Distributive Trades Survey suggested that activity in the festive shopping period is proceeding at a pretty modest pace. Retailers will be hoping that the last few shopping days before Christmas see a resurgence on the high street. … CBI …
19th December 2012
Contrary to recent suggestions, the sluggishness of the economic recovery cannot be blamed in large part on the energy sector. The economy’s problems run deeper than this. … Economic malaise reflects more than energy sector’s …
December’s MPC minutes had something of an “end of term” feel and simply confirmed that the Committee is in wait and see mode. Perhaps the most notable aspect was further evidence of the MPC’s growing concerns about the high pound. … MPC Minutes …
Continued high inflation is maintaining the squeeze on consumers’ spending power in the run-up to Christmas. Although we still expect inflation to fall back eventually, the prospect of further utility price hikes over the next couple of months suggests …
18th December 2012
Mr Carney’s arrival presents an obvious opportunity to reshape the monetary policy framework and the Governor-to-be last week gave a crucial indication that he, for one, is on board. … Fresh thinking coming to Threadneedle …
17th December 2012
As well as raising hopes about the UK’s future energy independence, the Government’s decision to allow “fracking” in the North West of England to recommence has fostered optimism that the UK economy will be boosted by a new “dash for gas” similar to that …
14th December 2012
The small improvement in the CBI Industrial Trends Survey in December suggested that manufacturing output might have stabilised towards the end of the year. Nonetheless, other indicators have been weaker, while output still seems likely to fall further in …
13th December 2012
The latest labour market figures provided further evidence that the recent strength of employment growth is fading. And real pay is still falling quite sharply. … Labour Market Data (Oct./Nov. …
12th December 2012
Inflation continues to be boosted by external factors over which the Monetary Policy Committee (MPC) can exercise little influence. One way to give the MPC more scope to help the economy could be to move to a target for domestically -generated inflation. …
11th December 2012
