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Our measure of household bad debt suggests that the bad debt cycle may already have turned. Even if it hasn’t, it will not be long before debt problems become far more widespread. This is another reason to expect the consumer and economic slowdown to be a …
2nd June 2008
The jump in CPI inflation from 2.5% to 3.0% in April has taken further near-term interest rate cuts off the agenda. Indeed, the MPC is unlikely to want to cut rates while inflation is above 3% and rising towards 4%, as it is likely to do as higher petrol …
This report is only available as a PDF. Click to download. … UK Household Borrowing (Apr.) & CIPS/RBS manuf. (May) …
This report is only available as a PDF. Click to download. … Slump in confidence settles housing/spending debate …
1st June 2008
Yesterday’s news that house prices have now fallen by 7% on the Nationwide house price index has brought to the fore the disagreements about the impact of house price falls on consumer spending. We therefore thought it a good time to reiterate our view …
30th May 2008
Not only does a June interest rate cut look out of the question, but the deterioration in the inflation outlook means that, unless the activity data start to look really dreadful, rates are unlikely to fall again until August or even later. But with rates …
29th May 2008
The latest surge in the oil price to $130 per barrel (pb) looks set to have mixed implications for the public finances. On the positive side, the higher level of prices should provide the Government with a windfall increase in North Sea tax revenues …
This report is only available as a PDF. Click to download. … Nationwide house prices (May) …
This report is only available as a PDF. Click to download. … UK CBI Distributive Trades (May/Q2) …
28th May 2008
This report is only available as a PDF. Click to download. … Surveys suggest further slowdown in the pipeline …
26th May 2008
This report is only available as a PDF. Click to download. … GDP: Output, Income and Expenditure (Q1) …
22nd May 2008
The official retail sales data are still holding up fairly well. But we still think that the weaker anecdotal evidence is giving a truer picture of conditions on the high street. What’s more, the deterioration in the inflation outlook has made us even …
This report is only available as a PDF. Click to download. … CBI Monthly Trends (May) …
21st May 2008
This report is only available as a PDF. Click to download. … UK Retail Sales (Apr.) & Business Investment (Q1) …
This report is only available as a PDF. Click to download. … MPC Minutes (May) & Public Finances (Apr.) …
20th May 2008
Today’s upward revisions to the ONS estimates of short-term immigration have left the figures looking more plausible. However, the more timely data on the number of Eastern Europeans finding work in the UK add to other recent evidence suggesting that …
The UK bond market is more concerned about inflation now than at any point since the inflation target was established in 1997 and such fears could persist for some time yet. But further ahead, a sustained downturn in activity should bring inflation back …
19th May 2008
The last month has seen the UK’s bond market become much more concerned about the outlook for inflation. In particular, 20 year break-even inflation rates have climbed to levels not seen since the Bank of England was first charged with the task of …
This report is only available as a PDF. Click to download. … MPC too optimistic on growth next year …
The deterioration in the inflation outlook is a double whammy for households. Not only will high inflation squeeze households’ real income growth, but it will also prevent interest rates from falling as quickly as previously looked likely. Accordingly, we …
15th May 2008
The recent dreadful news on inflation and the Bank of England’s hawkish Inflation Report suggest that interest rates will not fall as quickly this year as we had previously hoped – we have raised our yearend forecast from 4.0% to 4.5%. But the result is a …
This report is only available as a PDF. Click to download. … Bank of England Inflation Report (May) …
14th May 2008
This report is only available as a PDF. Click to download. … UK Labour Market Data (Mar./Apr.) …
This report is only available as a PDF. Click to download. … RICS Housing Market Survey (Apr.) & CLG house prices (Mar.) …
13th May 2008
This report is only available as a PDF. Click to download. … UK Consumer Prices/BRC survey (Apr.) …
12th May 2008
This report is only available as a PDF. Click to download. … Inflation Report could push rate expectations lower …
This report is only available as a PDF. Click to download. … Producer Prices & Trade (Apr./Mar.) …
11th May 2008
The MPC‘s inaction today confirms that inflation concerns are still hindering the Committee’s ability to respond to the ever-gloomier news on activity. The result will be a deeper and longer downturn in the economy which will eventually see interest rates …
8th May 2008
The foreign travel industry has recently sounded relatively upbeat about its ability to weather a consumer slowdown, arguing that people consider holidays a necessity, rather than luxury. However, a look back at the past suggests that when times get …
This report is only available as a PDF. Click to download. … UK Industrial Production (Mar.) …
6th May 2008
The share of household income eaten up by unavoidable or fixed outgoings has risen from 25% to 31% over the past 6 years. And there is little hope of this share falling back in the foreseeable future. … Discretionary spending to remain …
This report is only available as a PDF. Click to download. … Markets ignore the economics …
This report is only available as a PDF. Click to download. … UK CIPS/RBS Report on Services (Apr.) …
5th May 2008
