Filtered by Subscriptions: UK Economics Use setting UK Economics
April’s producer price figures indicated that firms are passing on a bigger than expected proportion of past increases in their costs to customers. But with the latest construction figures suggesting that the economy is even weaker than previously …
11th May 2012
Today’s decision by the Monetary Policy Committee (MPC) to pause its programme of asset purchases shows that the Committee is putting greater weight on the recent stickiness of inflation than the poor activity news. But if we are right in expecting …
10th May 2012
March’s official industrial figures confirmed that the underlying trend in production is still down and did not support the view that GDP growth in the first quarter is likely to be revised up. … Industrial Production …
In our view, recent suggestions that the high level of UK household debt is not a problem are complacent. We continue to think that further deleveraging by households will hold back consumer spending, while a rise in unemployment will increase debt …
9th May 2012
Results from the latest BRC survey accord with other evidence that the recent strength of high street spending is fading. … BRC Retail Sales Monitor …
The recent weakness of the activity data has made this week’s Monetary Policy Committee (MPC) decision much trickier than looked to be the case a few weeks ago. On balance, we think that the Committee will put more weight on the sticky inflation figures …
8th May 2012
Last week’s weak bank lending figures, as well as the softer business surveys for April, have intensified the dilemma facing the MPC ahead of its policy decision on Thursday. For now, we think that the MPC will put more weight on the sticky inflation …
7th May 2012
April’s slump in the Halifax house price index must be taken with a large pinch of salt. The underlying trend in house prices is soft, and will almost certainly soften further. But, for now, it is nothing like as weak as last month’s sharp drop in prices …
4th May 2012
The UK returned to recession in Q1, making this the weakest peacetime recovery in a century. Reasonably positive activity surveys for the first quarter raise some doubts about the ONS’s Q1 estimate, but more recent survey evidence from April has …
3rd May 2012
April’s CIPS/Markit report on services echoed the other surveys released this week in suggesting that the second quarter has got off to a soft start. … CIPS/Markit Report on Services …
The underlying trend in house prices has softened notably in the past five months. That seems consistent with reports that mortgage credit conditions are tightening and that the economy is now back in recession. … Nationwide House Prices …
Overall broad money growth remains extraordinarily weak. The MPC’s preferred measure of M4 is stronger, but the monetary indicators as a whole point to the need for further quantitative easing. … Monetary Indicators Monitor …
2nd May 2012
The post-stamp duty holiday downturn in mortgage approvals for new house purchase may have come to an end in March. But we are doubtful that mortgage lending will now mount a sustained recovery. … Mortgage Lending …
A bad result for the Government in Thursday’s local elections would suggest that the austerity backlash seen in the euro-zone has spread to the UK. But the coalition still seems set to stick to its fiscal plans. … Is the austerity backlash spreading to …
1st May 2012
The deterioration in April’s CIPS report on manufacturing suggested that the industrial sector has started the second quarter on a weak footing. The rebalancing of the economy towards production and exports seems to be a realistic prospect only in the …
Although there are doubts over the reliability of the Q1 GDP figure, it would take a huge revision to change the woeful nature of this recovery. And regardless of whether the ONS figures are right or not, the headlines have been screaming recession in the …
30th April 2012
The substantial divergence between the preliminary estimate of GDP and the closely-watched CIPS activity surveys has led many to question whether the official figures will be revised stronger in time. However, any upward revision seems likely to be small …
25th April 2012
Just two and a half years after it pulled out of the last one, the UK is already back in a recession. We still think that GDP will contract by 0.5% this year as a whole. … Provisional GDP …
We doubt that economic growth will be as strong as the OBR expects. But even if it is right, it may be too optimistic about the positive impact this will have on the public finances. … Will borrowing respond to the recovery as the OBR …
24th April 2012
March’s public finance figures suggested that the trend in the fiscal position has worsened and have given some reason to doubt that the coalition will be able to bring borrowing down in line with the plans in the new fiscal year. … Public finances …
This week’s preliminary estimate of Q1 GDP will finally answer the question of whether the UK has slipped back into technical recession. It will be a close-run thing as to whether or not the data show the economy contracting again. Our best guess is that …
23rd April 2012
All measures of spending improved in March, albeit partly due to temporary factors. … Consumer spending remains resilient …
20th April 2012
March’s surge in retail sales suggested that consumer spending remains surprisingly resilient and has increased the chances that the overall economy grew in the first quarter. However, we remain concerned about the outlook for consumer spending. … …
The latest regional figures suggest that the pace of economic recovery has increasingly diverged between the regions, with growth strengthening in most areas of the Midlands and the South, but weakening further in the North. … Regional Monitor …
19th April 2012
It may still be many years before the UK’s huge reserves of shale gas can be profitably exploited on a large scale, but the impact could then be significant. Even in the near term, the boom in the supply of shale gas in the US is another reason to expect …
18th April 2012
April’s fairly hawkish MPC minutes left it looking more likely that the Committee will pause its quantitative easing (QE) programme once the purchases currently underway are completed next month. But we still expect more QE later this year. … MPC …
The recent downward trend in inflation came to a halt in March, but this should be only temporary. We still expect inflation to fall below its target later this year. … Consumer Prices …
17th April 2012
The UK has now experienced about four years of below-average productivity growth. We remain sceptical that this means that productivity growth has been permanently damaged. So we still think that a significant rebound is likely at some point. But in the …
16th April 2012
With last week’s dribble of economic figures hardly setting the pulse racing, it was the pound’s appreciation to its highest level since August 2010 that made the headlines. … Sterling’s rise clouds export …
March’s producer prices figures confirmed that rising energy prices have pushed up manufacturers’ costs. Nonetheless, the figures still suggested that consumer price inflation is on course to fall to a low rate by the middle of next year. … Producer …
13th April 2012
The latest disappointing trade figures suggested that net trade’s positive contribution to GDP growth in the final quarter of last year is likely to have been a one-off. … Trade …
12th April 2012
Any lingering hopes that the European Central Bank (ECB) had either already solved the euro-zone crises or would yet come riding to the rescue with much more decisive action were surely put to bed by last week’s post-interest rate announcement press …
9th April 2012
Today’s decision by the Monetary Policy Committee (MPC) to stay the course and complete the previously authorised asset purchases was always likely, given the pattern of past QE decisions. While the pick-up in the activity surveys and rise in oil prices …
5th April 2012
February’s industrial production figures put something of dent in hopes that a recovery in manufacturing would help to rebalance the economy and help overall GDP to post a decent expansion in the first quarter. … Industrial Production …
The UK economy appears to have avoided a slide back into recession, if the activity surveys for the first quarter are to be believed. Indeed, the economic recovery appears to have gathered a bit of momentum in March. Nonetheless, the persistence of high …
4th April 2012
The improvement in March’s CIPS report on services added to the evidence that the overall economy expanded in Q1 and has therefore avoided a technical recession. But we would not conclude that the economic recovery is back on track yet. … CIPS/Markit …
The sharp rise in the Halifax house price index in March simply reverses the dip seen since last July. Therefore, it does little to alter the picture of a housing market that remains very weak. … Halifax House Prices …
The Monetary Policy Committee (MPC) appears increasingly divided between those members who want to provide the economy with more stimulus and those who think that they have now done enough. For now, the doves seem to be in the minority. And the extra …
2nd April 2012
The improvement in March’s CIPS report on manufacturing suggested that the industrial recovery still has some momentum. But there were also signs that manufacturing output may struggle to grow in the coming months. … CIPS/Markit Report on Manufacturing …
The breakdown of Q4 GDP showed that the greatest support to the economy at the end of last year came from consumer spending. However, the good news on the consumer sector last week was largely outweighed by the bad. … Can consumers continue to support …
The continued weakness of the broad money and lending figures supports our view that the Monetary Policy Committee will yet have to provide the economy with even more stimulus. … Monetary Indicators Monitor …
29th March 2012
The overall message from today’s data was that weak bank lending is likely to remain a significant constraint on the economic recovery. … Approvals, M4, Credit Conditions & …
The Nationwide house price index recorded its largest drop in two years in March, suggesting that our forecast of a 5% drop during 2012 remains on track. … Nationwide House Prices …
There are a number of reasons to remain optimistic about the outlook for the UK’s external sector. Admittedly, these are likely to be outweighed in the near-term by the knock on effects of the euro-zone recession. But once another tough year or two have …
28th March 2012
Recent claims that, despite the fiscal squeeze, government spending is still rising in real terms have revived the debate about whether the spending plans are actually as tough as they look. But while this is true on one definition of government spending, …
The downward revision to GDP in Q4 is not too worrying given that the economic news has improved since then. However, we doubt that the recent pick-up in the recovery will last. … National Accounts & Balance of Payments …
The furore over the so-called “granny tax” denominated the media’s post-mortem of the Budget, but the big picture is simply that little changed on Wednesday. … Enormous fiscal squeeze still lies …
26th March 2012
The consumer recovery appears to have picked up pace around the turn of the year, although the softening in the latest measures of high street spending suggest that the recovery is still on fragile ground. … Consumer recovery underway, but looking …
22nd March 2012
February’s retail sales figures suggested that the recent recovery on the high street is already running out of steam. … Retail Sales …
This was a neutral, steady-as-she-goes budget, with few implications for the macro-economy. From his speech, the Chancellor came across as wanting to be radical, but the measures failed to live up to the rhetoric. … Budget 2012: Not rocking the …
21st March 2012
