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While the 56,000 fall in employment in the three months to October was larger than the consensus expectation of a 40,000 drop, employment looks unlikely to continue to fall for much longer. Meanwhile, pay growth showed some tentative signs of a pick-up. … …
13th December 2017
While CPI inflation was higher than the consensus forecast and the MPC’s expectation in November, it has probably now peaked. As a result, there is little need for the MPC to raise interest rates again quickly in order to stamp out inflationary pressures. …
12th December 2017
There have been encouraging signs that stronger growth in manufacturing is helping to offset the slowdown in the consumer-facing parts of the services sector. Indeed, according to the Markit/CIPS surveys, other than brief periods in late-2007 and in 2011, …
8th December 2017
With the European Commission satisfied that “sufficient progress” has been made on the first phase of the Brexit negotiations, an important milestone on the road to Brexit has been reached. There are still many obstacles to overcome, but this supports our …
While the flurry of UK activity data was fairly disappointing, the industrial sector still looks on course to provide solid support to growth in Q4. … Industrial Production, Construction & Trade …
While the MPC is extremely unlikely to raise interest rates again at its meeting on 14th December, the key question is whether any of the nine committee members will vote for another hike so soon after the first rate rise in a decade in November. … MPC to …
7th December 2017
The Office for National Statistics confirmed that GDP grew by 0.4% in Q3 and the economy appears to have maintained its recent momentum so far in the fourth quarter. Indeed, November’s Markit/CIPS activity surveys indicate that quarterly GDP is on course …
5th December 2017
November’s set of Markit/CIPS surveys provide reassurance that the economy has held on to its recent momentum in the fourth quarter so far, rather than slowing any further. … Markit/CIPS Services PMI …
November’s BRC Retail Sales Monitor suggested that the real income squeeze may be constraining households’ discretionary purchases. But with inflation set to drop back in 2018, the outlook for consumer spending looks a bit brighter. … BRC Retail Sales …
While the UK Government’s revised offer on the financial settlement with the EU is a positive step forwards, it is not sufficient alone to progress negotiations to the next phase. Meanwhile, if payments are spread over many years then the macroeconomic …
1st December 2017
A slowdown in investment growth is one of the main factors underpinning the consensus expectation for economic growth to slow in 2018. That comes despite the fact that ordinary drivers of investment suggest that it will put in a decent performance. …
November’s Markit/CIPS manufacturing survey suggests that growth in the sector has accelerated further and provides encouraging signs that this strength will be maintained in the coming months. … Markit/CIPS Manufacturing PMI …
Expectations that the growth of the UK economy will slow further in 2018 appear to assume that Brexitrelated uncertainty will have a more damaging impact next year. But there is a growing chance that uncertainty will ease, perhaps helping growth to speed …
30th November 2017
November’s GfK/NOP survey suggested that consumers have become a bit more pessimistic in the runup to Christmas, perhaps reflecting the first rise in interest rates in a decade. But as the squeeze on real earnings eases, there should be scope for …
October’s household borrowing figures showed that slowing housing demand has continued to weigh on mortgage approvals. But there were few signs that consumers’ appetite for unsecured loans is fading. … Household Borrowing Monitor …
29th November 2017
The Bank of England’s Financial Policy Committee (FPC) gave a fairly upbeat assessment of the banking system in November’s Financial Stability Report that suggests that the financial sector would remain resilient and bank lending wouldn’t grind to a halt …
28th November 2017
While the Chancellor gave households something to cheer in last week’s Budget, the big picture is that austerity still has further to run. Moreover, the OBR’s new-found pessimism regarding future gains in productivity has fed through to an anaemic wages …
27th November 2017
Press reports suggest that the UK will increase its financial offer in a bid to move talks on to phase two at the December EU Council meeting. But the Irish border issue remains unresolved with just over a week remaining before diplomats start drafting …
24th November 2017
Given the persistently disappointing performance of productivity, it is entirely understandable that the Office for Budget Responsibility (OBR) decided in this week’s Budget to adopt more pessimistic assumptions about its future behaviour. What’s more, we …
The rebound in the CBI distributive trades survey was especially reassuring given the larger sample size behind this month’s figures. And the notable strength in the forward-looking balances suggests that retailers expect a decent festive period despite …
23rd November 2017
The second estimate of Q3 GDP confirmed that the economy grew modestly, with households leading the way. Looking ahead, we think that there is scope for a bit of a pick-up in growth, rather than a renewed slowdown as most others expect. … Second estimate …
This checklist is intended to help clients keep track of the key measures and numbers announced during the Chancellor’s Autumn Budget at 12.30pm Wednesday 22nd November 2017 and provide some instant context. … UK Autumn Budget 2017 …
21st November 2017
November’s survey painted a somewhat mixed picture for the manufacturing sector. Nonetheless, we expect the sector to still put in a fairly solid performance over Q4 as a whole. … CBI Industrial Trends Survey …
Despite deteriorating in October, the general trend in the public finances this year has still been an improving one. Nonetheless, the expected downward revisions to the OBR’s economic forecasts will probably mean that the Chancellor has no room for …
While the Government is yet to be defeated on the European Union Withdrawal Bill, there was little sign of the negotiations approaching “sufficient progress” this week. Given only two weeks remain for the UK to reach a position the EU is content with, …
17th November 2017
The strength of the labour market has been a key source of comfort since the Brexit vote. But this week’s labour market figures – which revealed a 14,000 fall in employment in the three months to September and the lowest annual rate of employment growth …
With real incomes under pressure from subdued nominal pay growth and rising inflation, it isn’t surprising that spending growth on the high street lost more momentum. Indeed, annual retail sales volumes growth dropped to its lowest since March 2013 in …
October’s official retail sales figures supported the timelier surveys in suggesting that spending on the high street has lost more momentum. But we doubt that sales growth will slow much further. … Retail Sales …
16th November 2017
The 14,000 quarterly fall in employment was the first since October last year. But given the strength of the hiring surveys we suspect this will prove a blip rather than the start of a sustained period of weakness. Meanwhile, there is still little …
15th November 2017
The MPC succeeded in striking a dovish tone as it raised Bank Rate for the first time in a decade. While the Committee didn’t frame the hike as “one and done”, it did convince investors not to expect a further increase until early 2019. We agree that …
14th November 2017
The recent upward trend in CPI inflation came to a halt in October. And while inflation could still inch up a little further in November, it is now likely to be close to its peak. … Consumer Prices & Producer Prices …
In the latest round of negotiations the EU hardened its stance on the sequencing of talks and the “clarifications” it needs from the UK – particularly on Northern Ireland – for “sufficient progress” on phase one of talks to be reached. And the EU’s Chief …
10th November 2017
As a result of the rise in oil prices in recent weeks, CPI inflation will certainly be a bit higher than we had previously anticipated in the near term. This suggests that it won’t be long before the Governor of the Bank of England gets his letter writing …
The flurry of activity data suggests that the industrial sector is helping to provide some offset to the consumer slowdown. However, net trade probably dragged on GDP growth in Q3. … Industrial Production, Construction & Trade …
Today’s BRC survey adds to the evidence from the CBI last week that October was a poor month for retailers. However, that is at least partly down to unseasonably warm weather which looks to have reduced clothing sales, and bear in mind that both surveys …
7th November 2017
The latest evidence suggests that the economy has picked up some pace in the second half of the year. For a start, quarterly GDP growth edged up from Q2’s 0.3% rate, to 0.4% in Q3. And October’s Markit/CIPS all-sector PMI points to a further pick-up to …
6th November 2017
David Davis’ appearance in front of the House of Lords’ Select Committee on the European Union provided some clues as to what will be required for the European Council to declare “sufficient progress” at its 15th December meeting. Negotiations resume on …
3rd November 2017
While the Monetary Policy Committee’s (MPC) decision to increase Bank Rate for the first time in a decade was largely priced into financial markets ahead of the November meeting, the Committee struck a more dovish tone than expected on the future path of …
The sharp rise in October’s Markit/CIPS measure of services activity suggests that Q4 got off to a solid start and perhaps provides some early justification for the MPC’s rate hike. … Markit/CIPS Services PMI …
The Monetary Policy Committee’s dovish comments and forecasts accompanying the first rise in interest rates for a decade left the markets anticipating only a very modest pace of monetary policy tightening over the coming years. But we still think that …
2nd November 2017
The rise in the manufacturing PMI in October suggests that the sector maintained its momentum at the start of Q4, and may help to reassure the MPC ahead of its decision on Thursday. … Markit/CIPS Manufacturing PMI …
1st November 2017
Despite their concerns about the economic outlook, consumers are still upbeat about their own financial position. As a result, we still think that household spending growth should be able to maintain a decent pace of growth in the second half of the year, …
31st October 2017
September’s household borrowing figures suggest that consumers remain confident enough to continue to borrow in order to smooth their spending against a backdrop of squeezed real incomes. Moreover, households should be able to stomach the modest rise in …
30th October 2017
Comments by the Prime Minister Theresa May and Brexit Secretary David Davis this week have put into focus the tight timeframe in which the terms of the UK’s exit from the EU must be negotiated, and places a significant weight on the December European …
27th October 2017
It’s fair to say that there was a certain amount of relief following this week’s GDP figures, which showed that the economy re-gained a bit of pace in Q3. But this hasn’t alleviated concerns that a further slowdown in consumer spending growth, and thus …
While it looks set to be quite a close call, on balance we think that a majority of the Monetary Policy Committee (MPC) will vote in favour of hiking interest rates at next Thursday’s meeting, for the first time in a decade. … MPC to press ahead with …
26th October 2017
The weakness of October’s CBI Distributive Trades survey was undeniably disappointing. But there are a number of reasons to take the sharp fall in the headline figure with a pinch of salt. … CBI Distributive Trades Survey …
The latest GDP figures revealed that the economy re-gained a bit of momentum in the third quarter and have probably sealed the deal on an interest rate hike next week. … Preliminary estimate of GDP …
25th October 2017
More than ten years on from the last increase in Bank Rate, investors expect a move from 0.25% to 0.50% at the Monetary Policy Committee’s meeting on the 2nd November. Indeed, the data have been consistent with the Committee’s condition that the economy …
24th October 2017
October’s CBI Industrial Trends Survey revealed a softening in order books and output expectations. Nonetheless, the survey still suggests that the recent improvement in the performance of the manufacturing sector has largely been maintained at the start …
23rd October 2017
