Filtered by Subscriptions: UK Economics Use setting UK Economics
The build-up of near-term price pressures has prompted a widespread re-think of when, and how far, interest rates will start to rise. While a near-term rate hike certainly now looks more possible, we think that it would do little good and, for now at …
11th January 2011
Today’s UK data provided further evidence that economic growth slowed towards the end of last year, although the snow is of course partly to blame. … UK BRC Retail Sales Monitor (Dec.) & BCC Survey …
According to the Halifax, house prices recorded a modest decline in the year to December 2010. With the pressures on house prices still building, we anticipate that prices will fall considerably further into the red this year. … Halifax House Prices …
10th January 2011
Last week’s CIPS/Markit activity surveys seemed to suggest that the economic recovery ground to a complete halt in December. But there are several reasons to think that the recovery is in better shape than these surveys suggest. … Has the recovery really …
If inflation expectations continue to increase, the Monetary Policy Committee (MPC) will no doubt seriously consider a ‘token’ interest rate rise. But for now, it still seems wedded to its view that the slack in the economy will eventually pull inflation …
6th January 2011
December’s CIPS/Markit report on services suggested that the economy ended 2010 on a much weaker note than the recent upbeat industrial data had indicated. What’s more, the Bank of England’s latest Credit Conditions Survey suggested that the impaired …
Perhaps the biggest risk facing the household sector is the possibility of a near-term interest rate rise. We do not think that a modest rate rise would have a disastrous effect on household incomes, although the wider effects of a rate increase could be …
5th January 2011
The economy has entered 2011 on a relatively strong note. However, the recovery looks set to lose momentum as 2011 progresses and the fiscal squeeze hits. We expect growth of just 1.5% both this year and next. … Recovery starts new year with strong …
The early evidence suggests that consumers have been out in force over the Christmas and new year “sales” period, helping to make up for any shopping trips cancelled before Christmas due to the snow. However, a tough year lies ahead for all …
4th January 2011
Broad money growth is still heading in the wrong direction. Bank lending remains weak too, and we continue to expect relatively tight credit conditions to act as a brake on the economic recovery in 2011. … Monetary Indicators Monitor …
Today’s UK data suggested that the economy ended 2010 on a relatively firm note. However, 2011 is set to be a challenging year and we continue to think that the recovery will struggle to maintain the strong growth rates seen recently. … CIPS/Markit Report …
We had been expecting the year to end on something of a high note for the high street, but obviously the snow has dampened these hopes somewhat. That said, people who have spent less than they anticipated on Christmas may just spend more in the “sales” …
23rd December 2010
We doubt that the economic recovery is on the secure footing required for it to maintain its recent pace. We expect GDP growth of just 1.5% in both 2011 and 2012. But at least the UK has turned a corner. … A bumpy road to …
22nd December 2010
The raft of UK data released today did little to improve the prospects for the economy next year, highlighting a number of reasons to be concerned over the sustainability of the recovery. … Nat. Accounts, Bal. of Payments (Q3) & MPC mins. …
November’s UK public finances figures confirmed that the recent stronger performance of the economy has so far had little positive impact on the dire fiscal position. … Public Finances …
21st December 2010
Last week’s November CPI figures showing inflation rising again to 3.3% has prompted further concerns that the Monetary Policy Committee is in danger of losing its anti-inflation credibility. A year ago, the Committee thought that inflation would …
20th December 2010
Consumer spending could end the year on a relatively strong note. But, we still expect the spending recovery to fade pretty quickly at the start of next year. … A reasonable end to the year in …
16th December 2010
November’s official UK retail sales figures suggested that consumers are still spending relatively freely. But the combination of tax rises, high inflation and public sector job losses make for a pretty nasty backdrop at the start of next year. … Retail …
The recovery in the UK labour market appears to be flagging even before the public sector job cuts have really started. We still expect unemployment to rise fairly sharply over the next couple of years and reach the 3 million mark. … UK Labour Market Data …
15th December 2010
November’s consumer prices figures will have done little to ease concerns over the continued stubbornness of price pressures in the UK economy. … Consumer Prices …
14th December 2010
Last week’s economic data releases brought further encouraging signs that that the long-awaited re-balancing of the UK economy away from consumers and the public sector towards industry and exports is finally underway. … Industrial recovery won't save the …
13th December 2010
November’s producer prices figures suggested that cost pressures in the industrial sector are still pretty strong. … Producer Prices …
10th December 2010
With the Monetary Policy Committee (MPC) still sitting firmly on the proverbial fence, this month’s no-change decision is all but certain to be repeated in the next month or two. But we still think that the Committee is over-estimating the ability of the …
9th December 2010
October’s UK trade figures add to other recent evidence suggesting that the external sector is finally playing a role in the economic recovery. That said, given the boost from the lower pound, we would probably have hoped to see a rather clearer …
The underlying downward trend in house prices on the Halifax measure accelerated in November. With the debate as to whether house prices are falling settled, the issue now is how severe future falls will be. … Halifax House Prices …
The latest official manufacturing data echoed the recent industrial surveys in suggesting that the recovery in the industrial sector is picking up pace again. But conditions on the high street are looking less rosy. … UK Ind. Production (Oct.) & BRC …
7th December 2010
Christmas appeared to come early for the Chancellor last week. On Monday, the Office for Budget Responsibility (OBR) published its revised economic forecasts, and, broadly speaking, endorsed the Chancellor’s view that the Government’s planned tax rises …
6th December 2010
November’s CIPS/Markit report on services was perhaps a bit disappointing after the recent run of improved news on the economy. The big picture is that the economic recovery is still fragile and fitful – and probably incapable of getting through the …
3rd December 2010
Most members of the Monetary Policy Committee (MPC) are continuing to sit firmly on the proverbial fence. But while a policy change does not look imminent, we still think that the faltering economic recovery will prompt the launch of socalled “QE2” early …
2nd December 2010
With the fiscal squeeze set to kick in soon and the outlook for demand in the UK’s main export markets looking weak, one remaining hope is that stockbuilding could support the recovery next year. In our view, though, any further boost from restocking is …
1st December 2010
The UK economy finally appears to be re-balancing away from consumers and towards the external sector. … Tentative signs of re-balancing …
November’s UK CIPS/Markit report on manufacturing suggested that the industrial recovery is back on track. … CIPS/Markit Report on Manufacturing …
The underlying downward trend in house prices on the Halifax measure accelerated in November. With the debate as to whether house prices are falling settled, the issue now is how severe future falls will be. … Nationwide House Prices …
The recent renewed falls in house prices have revived the long-standing debate about the effect of the housing market on consumer spending. We stand by our long-held view that there is a strong link between housing and spending and expect a second …
The dominant themes of this Statement come not from the Chancellor but from the OBR. It now paints a pretty gloomy picture of the immediate economic outlook. Even so, we think its forecasts are not gloomy enough. … Housing downturn another blow for …
30th November 2010
The downgrades to the Office for Budget Responsibility’s economic growth forecasts for the next two years are hardly a vote of confidence in the Government’s claim that the economy is capable of withstanding the looming fiscal squeeze. And with the OBR’s …
29th November 2010
There is still little evidence of any pick-up in the growth rate of the broad money supply – supporting Mervyn King’s view that inflation will fall further ahead. Meanwhile, bank lending remains exceptionally weak. … Monetary Indicators Monitor …
The sixth consecutive monthly fall in mortgage approvals for house purchase underlines the message that the mortgage market is severely depressed. We expect it to remain that way throughout 2011. … Mortgage Lending …
Last week’s bailout for Ireland did little to ease concerns about the troubled euro-zone periphery. At least the UK banking sector’s exposure to the so-called “PIIGS” – Portugal, Ireland, Italy, Greece and Spain – is a relatively modest 5% or so of total …
November’s CBI Distributive Trades Survey suggested that demand on the high street is rising at a rapid rate, perhaps reflecting early signs of a boost to spending ahead of the VAT rise on 1st January. … CBI Distributive Trades Survey …
25th November 2010
The second estimate of UK GDP confirmed that the economic recovery was still going strong in the third quarter. But we still have deep concerns about its sustainability in the face of the immense fiscal squeeze. … GDP: Output, Income and Expenditure …
24th November 2010
The UK gilt market appears to have suffered from a serious bout of the inflation jitters over recent weeks. Sharp rises in global commodity prices and the continued stubbornness of consumer price inflation at home have both contributed to the rise in …
22nd November 2010
Consumer spending is still recovering, but the improvement remains fitful. Spending should receive some support in the last few weeks of the year from consumers bringing forward spending ahead of the VAT rise (although some firms may have already raised …
18th November 2010
The latest UK retail sales figures suggested that the consumer spending recovery, while a bit lacklustre, hasn’t petered out yet. But another set of poor public finances cast further doubt on whether the Government will meet its fiscal forecasts. … Retail …
Concerns have grown that the Irish debt crisis could have severe consequences for the UK economy. But our impression is that any effects on the UK economy are likely to be pretty small. … What does the Irish crisis mean for the …
17th November 2010
The minutes of November’s MPC meeting and the latest labour market figures tell us little new about the monetary policy debate. The MPC remains in wait and see mode until clearer signals on the economy’s likely path emerge. … UK MPC Minutes & Labour …
October’s CPI figures could mark the start of a difficult period for the MPC. But we expect most members to hold their nerve and focus on the medium-term outlook. … UK Consumer Prices …
16th November 2010
Some of the reaction to last week’s Bank of England Inflation Report - including the 10bps or so rise in bond yields - seemed a bit over the top to us. After all, the MPC’s growth and longer-term inflation forecasts were broadly unchanged from those in …
15th November 2010
