Filtered by Subscriptions: UK Markets Use setting UK Markets
This page has been updated with additional analysis since first publication. Sticky price pressures will add to the Bank of England’s unease The rise in the flash composite activity PMI, from 48.7 in October to 50.1 in November, is still consistent with a …
23rd November 2023
The net giveaway the Chancellor announced in the Autumn Statement is designed to curry favour ahead of an election late in 2024. However, fiscal policy is still being tightened in 2024/25 and it looks as though whoever wins the election will have to …
22nd November 2023
For more detailed analysis of the Autumn Statement, see our UK Economics Focus here . Chancellor chips away at fiscal tightening ahead of an election The net new giveaway the Chancellor announced today of £14.3bn in 2024/25 (0.5% of GDP) is a bit bigger …
Note: We’ll be discussing the UK macro and market consequences of the Chancellor’s Autumn statement at 10:00 EST/15:00 GMT on 22nd November. Register here for this 20-minute online briefing. This page has been updated with additional analysis since first …
21st November 2023
This is an updated checklist which takes into account our latest expectations for the Autumn Statement. The checklist helps clients keep track of the key policies and forecasts announced during the Chancellor’s Autumn Statement at 12.30pm (GMT) on …
20th November 2023
We’ll be discussing the UK macro and market consequences of the Chancellor’s Autumn statement at 10:00 EST/15:00 GMT on 22nd November. Register here for this 20-minute online briefing. The Chancellor, Jeremy Hunt, will want to use next Wednesday’s Autumn …
17th November 2023
This page has been updated with additional analysis since first publication. Retail woes continued at the start of Q4, and further weakness to come The 0.3% m/m fall in retail sales volumes in October means that after contracting by 1.0% q/q (which was …
With the government still languishing far behind in the opinion polls and an election required before the end of January 2025, the Chancellor, Jeremy Hunt, is under more pressure than ever to pull something out of the bag at the Autumn Statement on …
15th November 2023
This page has been updated with additional analysis since first publication. Slower progress ahead after big plunge The fall in CPI inflation from 6.7% in September to 4.6% in October was a bit bigger than expected (consensus and BoE forecasts 4.8%, CE …
While wage growth will continue to slow, the smaller-than-expected fall in September supports our view that the Bank of England will keep rates on hold at their current level of 5.25% until late in 2024. Wage growth eased more slowly than we and most had …
14th November 2023
This page has been updated with additional analysis since first publication. Wage growth continues to ease, but only slowly With wage growth continuing to ease and signs that a further loosening in the labour market lies ahead, higher interest rates …
We may have to wait a bit longer for the start of the mild recession that we have been forecasting. The published quarterly growth rate of real GDP of 0.0% in Q3 implies that the economy stagnated. Although technically real GDP fell by 0.03% q/q (or £163 …
10th November 2023
This page has been updated with additional analysis since first publication. Recession or not, economy not weak enough to quash price pressures The Q3 GDP data will spark a big debate about whether or not a recession has just begun (the published growth …
The recent weakening in employment, easing in wage growth and signs that households are saving more and spending less have provided more confidence that higher interest rates are working. But we think that the restraints on UK labour supply and sticky …
8th November 2023
We can understand if the phase “the lady doth protest too much” sprang to mind when listening to the Bank of England after it left interest rates at 5.25% for the second meeting in a row on Thursday. Indeed, the Old Lady of Threadneedle Street stressed so …
3rd November 2023
We’ll be discussing the latest Fed, ECB and Bank of England policy decisions in a 20-minute Drop-In webinar at 3pm GMT today. (Register here .) The Bank’s decision to leave interest rates at 5.25% for the second time in a row and to double down on the …
2nd November 2023
Bank doubles-down on rates staying high for long The Bank’s decision to leave interest rates at 5.25% for the second time in a row and the doubling down on the message that rates cuts are a long way away supports our view that Bank Rate will stay at 5.25% …
While we think sticky core inflation will mean that the Bank of England keeps interest rates at their peak of 5.25% until late in 2024, we think the markets have gone too far in concluding that rates will still be as high as 4.50% by the end of 2025. We …
30th October 2023
Note: We’ll be discussing the latest Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm GMT on Thursday 2 nd November . (Register here .) This page has been updated with additional analysis since first publication. Drag on lending and …
Note: We’ll be discussing the latest Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm GMT on Thursday 2 nd November . (Register here .) In the last few months there has been more concern over the accuracy of key economic data. The recent …
27th October 2023
Note: We’ll be discussing the latest Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm GMT on Thursday 2 nd November . (Register here .) A second consecutive hold to all-but confirm that 5.25% is the summit for interest rates Sticky core …
26th October 2023
We suspect that more weakness in the housing market will weigh on real GDP by further reducing residential investment and consumer spending. This is one reason why we think the economy is close to a mild recession, if it isn’t already in one. Higher …
25th October 2023
This page has been updated with additional analysis since first publication. Signs that recession may be underway, but services price inflation still sticky The composite activity PMI inched up from 48.5 in September to 48.6 in October after five months …
24th October 2023
This page has been updated with additional analysis since first publication. Faint signs the labour market hasn’t loosened as much The labour market appeared not to loosen as much as we thought in August based on the Office for National Statistics’ (ONS) …
We'll be discussing the implications of the end of the ultra-low interest rates era and the rise in R* in an online Drop-In at 12:30 GMT on Tuesday 31st October. (Register here .) The conflict in the Middle East continues to dominate the news and from an …
20th October 2023
This page has been updated with additional analysis since first publication. The start of another retail recession The 0.9% m/m fall in retail sales volumes in September meant sales volumes fell 0.8% q/q in Q3 and suggests that after the 18-month-long …
This page has been updated with additional analysis since first publication. Buoyant economy to date increases scope for pre-election giveaways September's public finances figures continued the recent run of better-than-expected news on the fiscal …
We'll be discussing the implications of the end of the ultra-low interest rates era and the rise in r* in an online Drop-In at 12:30 GMT on Tuesday 31st October. (Register here .) As our new higher estimate of the real neutral interest rate, or r*, for …
19th October 2023
There is a growing body of evidence that suggests wage pressures are past their peak, but it’s not clear how quickly wage growth will slow. The gradual loosening in the labour market and the experience in the US suggests that UK wage growth may ease only …
18th October 2023
The failure of CPI inflation to fall in September from August’s rate of 6.7% will be a bit of a disappointment to most (consensus forecast 6.6%, CE forecast 6.8%). But at 6.7% it is still below the 6.9% rate the Bank of England projected back in August …
This page has been updated with additional analysis since first publication. Wage growth passed its peak, but it will fall only gradually Cooling labour market conditions appeared to start feeding through into an easing in wage growth in August. That …
17th October 2023
Almost as fast as gilt yields rose (see here ) they have subsided. After surging from 4.68% on 2 nd October to a 21-year high of 5.11% last Friday, the 30-year gilt yield dropped to 4.72% on Thursday, although it has since ticked up to 4.85% on the back …
13th October 2023
Higher interest rates weighed sharply on households’ demand for mortgages in Q3 and banks expect demand for mortgages to fall further in Q4. This is a clear sign that higher interest rates are working. And our forecast that mortgage rates will stay above …
12th October 2023
This page has been updated with additional analysis since first publication. August’s resilience won’t prevent contraction in GDP in Q3 The 0.2% m/m rise in real GDP in August followed July’s 0.6% m/m contraction and will raise hopes that the economy has …
The recent rise in gilt yields has been almost as fast as the political furore over the cancellation of the northern leg of HS2 this week. The 30-year gilt yield rose from 4.68% at the start of last week to a 20-year high of 5.06% at the time of writing …
6th October 2023
The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous financial crises that have been caused by sharp moves in …
4th October 2023
Slowing momentum in activity, the recent decline in employment, and the sharp falls in core CPI and services inflation in August are clear signs that higher interest rates are weighing more heavily on the economy. This strengthens our view that the mild …
While some measures of optimism have been improving, the majority of the survey evidence suggests the economy is weakening and the chances of the mild recession we have been forecasting have increased. The 0.5% m/m fall in real GDP in July and the decline …
After the huge upward revisions to the level of GDP in Q4 2021 announced at the start of September, which resulted in the UK leapfrogging Germany to sixth place in the league table of best performing G7 economies since the pandemic (see here ), Friday’s …
29th September 2023
This page has been updated with additional analysis since first publication. Higher interest rates weighing more heavily on lending The drag from higher interest rates on bank lending grew further in August, particularly in the housing market. Although …
This page has been updated with additional analysis since first publication. GDP growth nudged up, but resilience won't last The final Q2 2023 GDP data release shows that the economy was a bit more resilient in the first half of this year than we …
We suspect the pound will fall from $1.22 now to $1.20 by the end of this year. That’s not due to lower interest rate expectations in the UK compared to the US or the euro-zone, as we think the UK will be the last to cut rates. Instead, it’s due to the …
28th September 2023
The sharp slowdown in broad money growth since late last year suggests that higher interest rates are working by reducing households’ and firms’ demand for borrowing, which should lead to softer activity and lower inflation. This supports our view that a …
26th September 2023
This week’s news that interest rates are probably at their peak (see here ) and the news that public borrowing in the current fiscal year is £11bn below the Office for Budget Responsibility’s forecast has raised the pressure on the Chancellor to deliver …
22nd September 2023
This page has been updated with additional analysis since first publication. Signs that recession has started all-but confirms interest rates have peaked The fall in the activity PMI further below the boom-bust level of 50.0 in September suggests the …
This page has been updated with additional analysis since first publication. Not as good as it looks, sales likely to fall in Q3 The 0.4% m/m rebound in retail sales volumes in August isn’t as good as it looks as it partly reflected a pickup in sales …
We think that both the Fed and the BoE are finished hiking interest rates and will cut by more than investors are discounting over the next couple of years. We also expect the US and UK economies to tip into mild recessions before long. These similarities …
21st September 2023
Note: We’ll be discussing September’s Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm BST today. Register here to join. The surprise decision by the Bank of England to leave interest rates unchanged at 5.25% today probably means that …
The Bank’s job is done The surprise decision by the Bank of England to leave interest rates unchanged at 5.25% today probably means that rates are already at their peak. We think rates will stay at this peak of 5.25% for longer than the Fed, the ECB and …
This page has been updated with additional analysis since first publication. Note: We’ll be discussing September’s Fed, ECB and Bank of England policy decisions in a Drop-In at 3pm BST today. Register here to join. A bit more wiggle room for pre-election …
