Filtered by Subscriptions: UK Markets Use setting UK Markets
This page has been updated with additional analysis since first publication. Sticky price pressures may mean rate cuts are slower and smaller June’s composite PMI suggests the economic recovery lost a bit of momentum towards the end of the second quarter. …
21st June 2024
Rebound suggests lower inflation is beginning to support consumption The larger-than-expected increase in retail sales in May more than reversed the rain-driven weakness in April. And with inflation falling back to target, Bank Rate likely to be reduced …
This page has been updated with additional analysis since first publication. Better news doesn’t mask fiscal challenge awaiting next government May’s public finances figures delivered some better news on the fiscal position after the recent run of …
The proposal to save governments money by ending interest payments on commercial banks’ reserves is a lot more complicated than some of its advocates suggest. The extreme version could either cause central banks to lose control of monetary policy or …
20th June 2024
The Bank of England predictably left interest rates unchanged at 5.25% today but continued to give the impression that the pieces of the puzzle are almost in place for it to cut rates. This lends some support to our view that the Bank will first cut rates …
BoE leaves the door open to an August rate cut The Bank of England predictably left interest rates unchanged at 5.25% today but continued to give the impression that the pieces of the puzzle are almost in place for it to cut rates. As a result, we still …
This page has been updated with additional analysis since first publication. Stubborn services inflation still a point of concern for BoE We’ll be discussing the outlook for Bank of England, ECB and Fed policy in a 20-minute online briefing at 3pm BST on …
19th June 2024
Higher levels of housebuilding is a prize that both Labour and the Conservatives seek, evidenced by the identical target of building 300,000 new homes a year published in their manifestos this week. (You can see all of our election analysis here , and …
14th June 2024
BoE watching and waiting for more evidence that inflation will settle at the 2% target But a summer rate cut is more likely than investors expect We think rates will be cut to 3.00% next year, below current market pricing of 4.00% Far more interesting …
13th June 2024
While what’s in and what’s out of the election manifestos is informative, the bigger issue is whether the next government delivers or deviates from its manifesto. This Update sketches out three plausible scenarios and the possible implications for the …
The current fiscal framework is not perfect and could be reformed to improve investor confidence in the management of the public finances, tilt the composition of spending towards investment and reduce political uncertainty. However, the importance of the …
12th June 2024
This page has been updated with additional analysis since first publication. Despite stagnating in April, economy will be a tailwind for the next govt The stagnation in GDP in April (consensus 0.0%, CE -0.1%) doesn’t mean the economic recovery has been …
This page has been updated with additional analysis since first publication. S ticky wage growth a lingering concern for the BoE The stickiness of wage growth in April will be a lingering concern for the Bank of England. But with employment falling …
11th June 2024
This week both the Conservative and Labour Party have been quick to tell us about ‘financial black holes’ in their opponent’s tax and spending plans. But there are two big things neither party is telling us. First, sticking to their fiscal rules means …
7th June 2024
Just as fixed mortgage rates have shielded homeowners from rising interest rates, they will prevent households’ interest costs from falling rapidly when interest rates are cut. While borrowers on tracker and two-year fixed rate deals will soon see their …
6th June 2024
Whoever wins the general election on 4 th July will have three main choices when it comes to spending and taxes. First, the new government could change the fiscal rules to give itself more fiscal space. Second, it could keep the current fiscal rules and …
5th June 2024
With both Labour and the Conservatives this week ruling out increases in income tax, national insurance and VAT, it remains difficult to see how cuts to public services can be avoided after the election. (For all our election analyses, see here .) But …
31st May 2024
This page has been updated with additional analysis since first publication. Drag on activity from high interest rates continues to fade While April’s money and lending figures suggest the recent rebound in the housing market is cooling and households …
The stickiness of inflation in April has led us to shift back our forecast for the timing of the first interest rate cut from 5.25% from June to August. Even so, our view that CPI inflation will fall from 2.3% in April to below 1.5% by the end of this …
29th May 2024
It’s tempting to think that every bit of economic data released between now and the general election on 4 th July will make a difference to who will be Prime Minister on 5 th July. Inevitably, data releases will be written up as “good” or “bad” for Sunak …
24th May 2024
Outlook for retailers remains bright despite soggy start to Q2 The 2.3% m/m fall in retail sales volumes in April was much bigger than our forecast for a 0.5% m/m fall and the consensus forecast for a 0.4% m/m decline as the unusually wet weather …
We still think inflation will fall faster than the Bank of England is expecting, but in the light of April’s CPI release we now expect the downward trend to be slower and smaller. As a result, we have shifted back our forecast for the timing of the first …
23rd May 2024
Putting the politics aside, the high number of migrants coming to the UK for work is the main reason why the number of people willing and able to work isn’t shrinking. The provisional data show that net inward migration to the UK was 685,000 in the year …
Survey provides support for summer rate cut Today’s May flash PMI survey will have provided the Bank of England with some comfort after yesterday’s stronger-than-expected inflation data for April. Crucially, the further fall in the services output prices …
We’ll be discussing what the election means for the economy and financial markets in a 20-minute online briefing at 9.30am BST on Thursday 23rd May. (Register here .) The general election on Thursday 4 th July, which the Prime Minister announced today, …
22nd May 2024
This page has been updated with additional analysis since first publication . Limited scope for tax cuts April’s public finances figures got the new 2024/25 fiscal year off to a shaky start and cast further doubt on the Chancellor’s ability to unveil big …
We’ll be discussing the outlook for UK inflation and interest rates in a 20-minute online briefing at 9.30am BST today. (Register here .) This page has been updated with additional analysis since first publication. Stickiness of services inflation makes …
We’ll be discussing the outlook for UK inflation and interest rates in a 20-minute online briefing at 9.30am BST on Wednesday 22nd May shortly after the release of April's CPI data. (Register here .) Next Wednesday’s release of April’s CPI inflation data …
17th May 2024
We discussed the outlook for UK inflation and interest rates in an online briefing just after the release of April's CPI data. Watch that briefing here . Our forecast that CPI inflation will fall from 3.2% in March to below 2.0% in April and below 1.0% …
16th May 2024
This note answers some of the most frequently asked questions that we received from clients during a recent online briefing about the latest US tariffs on China. Watch the original briefing here . What has been announced? Yesterday was the end of a …
15th May 2024
This page has been updated with additional analysis since first publication. Sticky wage growth is a lingering concern for the BoE While the further easing in regular private sector pay growth in March suggests that wage pressures faded a bit faster than …
14th May 2024
With the Bank of England hinting on Thursday that it is close to cutting interest rates and that rates may need to fall further than investors expect, we have become a bit more confident in our view that, due to low inflation, rates will be cut from 5.25% …
10th May 2024
This page has been updated with additional analysis since first publication. Strong GDP data probably won’t prevent BoE rate cuts The 0.6% q/q rise in GDP in Q1 confirmed that the recession ended at the start of this year and suggests the economy has been …
We’ll be discussing the outlook for Bank of England policy in a 20-minute online briefing at 3pm today. (Register here .) While leaving interest rates at 5.25% today as widely expected, the Bank of England gave the impression that it is close to cutting …
9th May 2024
For more detailed and up-to-date analysis see here . Rapid falls in inflation may prompt BoE to cut rates in June The Bank of England left interest rates at 5.25% today as widely expected, but it gave the impression it’s getting closer to cutting rates. …
While regular private sector wage growth in February and services CPI inflation in March were both a bit higher than the Bank of England had expected, we still think that the flatlining of the economy over the past two years will dampen price pressures …
8th May 2024
An interactive guide to the impact of market interest rate expectations on the fiscal policy space available to the Chancellor. This content was last updated on 21st November 2024. Updated every two weeks. If you have subscriber access to the headroom …
We’ll be discussing the outlook for Bank of England policy in a 20-minute online briefing at 3pm BST on Thursday 9th May. (Register here .) OECD too downbeat We think the OECD’s new forecast that the UK will grow at a slower rate in 2025 (of 1.0%) than …
3rd May 2024
We’ll be discussing the outlook for Bank of England policy in a 20-minute online briefing at 3pm BST on Thursday 9 th May. (Register here .) Rates on hold at 5.25% and Bank unlikely to provide a strong hint first cut will be soon Faster fall in inflation …
2nd May 2024
This page has been updated with additional analysis since first publication. Further evidence the drag on activity from high interest rates is fading March’s money and credit figures provide further evidence that the drag from high interest rates is …
30th April 2024
While expectations for interest rate cuts in the UK have been pared back in recent months amid growing inflation concerns in the US, we think the markets have gone too far in concluding that UK interest rates will still be as high as 4.00% by the end of …
29th April 2024
This interactive dashboard allows you to explore all of our forecasts and key data for the UK economy. If you have subscriber access to the data underlying this redesigned dashboard, you can download it via the menu options in the top right of each chart …
This week the FTSE 100 broke through the 8,000 mark for the first time since its brief three-day flutter in February last year and reached a record high of 8,100. This appears to be justified based on the recent improvement in economic activity. Indeed, …
26th April 2024
Foreign-born workers have been entirely responsible for the post-pandemic recovery in employment. But a gradual rise in labour market participation and a moderation in net migration may mean the share of UK-born employment starts to rise again. The risk …
25th April 2024
If sustained, the recent rises in market interest rate expectations and gilt yields may mean that the Chancellor has only around £5bn of fiscal headroom, down from £8.9bn in the March Budget, with which to fund further tax cuts before the next election. …
23rd April 2024
This page has been updated with additional analysis since first publication. Easing services prices may encourage BoE to cut rates in the coming months Although the unexpected rise in the composite activity PMI in April suggests the economy grew faster at …
This page has been updated with additional analysis since first publication. Limited scope for tax cuts March’s public finances figures show that public borrowing in 2023/24 came in £6.6bn higher than the OBR predicted only a month ago, casting further …
In the previous Weekly we said “the risks are tilted towards inflation proving sticker and rate cuts happening a bit later”. This week’s global and domestic events have left our forecast that interest rates will first be cut from 5.25% in June and will …
19th April 2024
This page has been updated with additional analysis since first publication . Retail outlook still bright despite sales stalling in March Although retail sales volumes remaining unchanged in March was worse than expected (consensus forecast +0.3% m/m, CE …
This page has been updated with additional analysis since first publication. Upside surprise, but big drop to below 2% still coming in April The smaller-than-expected fall in CPI inflation from 3.4% in February to 3.2% in March (BoE and consensus 3.1%, CE …
17th April 2024
