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The CBI Distributive Trades Survey provided another encouraging sign that retail sales have grown strongly Q4, despite unseasonably warm weather earlier this quarter. What’s more, the prospects look bright for consumer spending over the coming months. … …
26th November 2014
The second estimate of Q3 GDP indicated that the end of the squeeze on real pay is helping consumers to drive the overall recovery. What’s more, the prospects look bright for continued strong growth over the next few years. … GDP Second Estimate …
Recent outright falls in commodity, import, producer and retail prices should provide a timely fillip to households and firms. However, with CPI inflation already well below target and set to fall to its lowest rate in over 12 years over the next few …
21st November 2014
The latest public borrowing figures showed that the economic recovery is still doing little to heal the public finances and so undermined the view that the books can be balanced through spending cuts alone. … Public Finances …
Prospects still look bright for further solid growth in consumer spending. Admittedly, weaker growth in house prices and the looming prospect of interest rate hikes may soon dampen consumers’ spirits. But a combination of low inflation, further strong …
20th November 2014
October’s retail sales figures provided an encouraging sign that a combination of further strong gains in employment and the end of the real wage squeeze is supporting the consumer recovery. … Retail Sales …
In the space of just three months, UK markets have pushed back their expectations for the first rise in official interest rates from February to November 2015. This may turn out to be an overreaction – the recovery has only lost a little pace, while the …
19th November 2014
The minutes of November’s MPC meeting struck a more balanced tone than last week’s Inflation Report and signalled that it might not take much stronger news on wages or growth for other members to join the two already voting to raise rates. … MPC Minutes …
The slight rise in CPI inflation in October should be a blip in its downward trend. Indeed, falling import and commodity prices look set to provide timely support to real incomes at a time when other sources of support for the recovery are fading. … …
18th November 2014
There have been suggestions in some quarters that the MPC’s new forecasts for strong growth, low unemployment and below-target inflation push the envelope of plausibility. However, the MPC is certainly not forecasting an unprecedented combination of …
14th November 2014
The recovery’s acceleration just as the pace of fiscal consolidation eased last year could suggest that GDP growth will slow sharply when the fiscal squeeze re-intensifies after the general election. But there are reasons to think that further austerity …
13th November 2014
The latest figures showing that annual growth in average earnings has only just begun to exceed inflation appear to understate the extent to which living standards are improving for most people. … Are real wages rising faster than the official figures …
12th November 2014
November’s Bank of England Inflation Report gave another strong indication that the Monetary Policy Committee (MPC) expects to keep interest rates on hold for a number of months yet and then increase them only very gradually thereafter. … Bank of …
The latest labour market data provided encouraging signs that the strength of the jobs recovery is finally starting to feed through to a sustained pick-up in real wages. … Labour Market Data …
October’s BRC Retail Sales Monitor might raise concerns that the consumer recovery is losing steam. However, the underlying picture is not as weak as it looks. … BRC Retail Sales Monitor …
11th November 2014
This week’s Inflation Report should confirm that the majority view on the Monetary Policy Committee remains that the economy is still some months away from justifying higher interest rates. Indeed, the Committee’s forecasts for both GDP growth and …
7th November 2014
September’s trade data provided further signs that the UK’s recovery remained distinctly domestic-led in the third quarter as exporters struggled to cope with the strong pound and weak external demand. … Trade …
The former Chancellor, Alistair Darling, recently suggested that PPI payments may be behind the strength of the consumer recovery. But the reality is that they have only provided a meagre boost to households’ incomes over recent years and are unlikely to …
6th November 2014
With inflation easing and uncertainty about the economic outlook growing, the MPC’s decision to keep Bank Rate at 0.5% looks set to be repeated for a few more months. And while the MPC will not wait to raise rates until price pressures build, it is …
September’s industrial production data confirmed that the weaker global backdrop and strong pound have held back the manufacturing sector’s recovery. However, robust domestic demand should ensure its recovery doesn’t grind to a halt. … Industrial …
Fears that the UK’s economic recovery is rapidly losing steam appear largely overblown. Admittedly, the Markit/CIPS Composite PMI, which weights together the headline indices for the manufacturing, construction and services sectors, weakened to a 17-month …
5th November 2014
Despite the weaker-than-expected tone of October’s Markit/CIPS services survey,the UK’s economic recovery looks unlikely to lose much steam in the fourth quarter. … CIPS Report on Services …
October’s Markit/CIPS manufacturing survey provided some tentative signs that the sector’s recovery regained some momentum at the beginning of Q4. However, it will remain up to the services sector to drive overall growth in the near term. … Markit/CIPS …
3rd November 2014
While the additional minimum capital buffers announced by the Financial Policy Committee (FPC) this afternoon will require some banks to raise more capital over the coming years, they do not appear to be tough enough to prevent the recovery in bank …
31st October 2014
Given the perceived boost to the economic recovery from strong gains in house prices over the past year or so, signs that the housing market is beginning to cool may raise concerns that the overall economic recovery may slow along with it. … Cooling …
While the GfK/NOP composite index of consumer confidence edged down again in October, it remained consistent on past form with robust spending growth. What’s more, sentiment should be supported by a recovery in real pay in the months ahead. … GfK/NOP …
The current weakness of domestic price pressures and the euro-zone’s continued malaise suggest that the MPC is likely to keep Bank Rate on hold for a few more months. But the Committee is unlikely to wait for all of the downside risks to the growth …
30th October 2014
The latest monetary indicators provided further evidence to suggest that there is no pressing need for the Monetary Policy Committee to start to raise interest rates yet. … Monetary Indicators Monitor …
29th October 2014
September’s household borrowing figures confirmed that new mortgage rules and cooling demand have continued to weigh on mortgage approvals. However, we doubt that this downward trend will persist for much longer. … Household Borrowing Monitor …
While it is encouraging that all four of the major UK banks passed the European Banking Authority’s stress tests, the narrow margin by which some did so raises concerns that the Bank of England’s more stringent tests later this year will require banks to …
27th October 2014
The CBI Distributive Trades Survey provided an encouraging sign that retail sales picked up in October following weather-related weakness last month. What’s more, the prospects for consumer spending over the coming months look bright. … CBI Distributive …
On the face of it, the recent sharp fall in equity prices and slowdown in the housing market suggest that the significant improvement in consumer confidence seen over the last year might be reversed soon. But other developments – such as the easing of the …
24th October 2014
The preliminary estimate of Q3 GDP showed that the UK’s economic recovery has broadly maintained its momentum despite the weak global environment and stronger sterling exchange rate. … Preliminary estimate of GDP …
The outlook remains bright for further strong growth in consumer spending over the coming quarters. Although the jobs recovery has slowed, the economy has retained a healthy degree of momentum, suggesting that productivity is finally on the rise. This …
23rd October 2014
While the economy’s recent revival has so far failed to deliver the Conservative party a sustained lead in the opinion polls, there are reasons to think that this could change before the general election. … Could the economy still propel the Tories to …
The weaker-than-expected tone of October and Q4’s CBI Industrial Trends Survey added to other indicators which suggest that the near-term outlook for UK manufacturers remains pretty gloomy. … CBI Industrial Trends Survey (Oct & …
September’s monthly decline in retail sales volumes can be entirely explained by temporary factors. Indeed, the recovery in consumer spending still looks robust. … Retail Sales …
The minutes of October’s MPC meeting showed that the views of those voting to keep interest rates on hold have becoming more entrenched. As such, we have pushed back our forecast for the first rise in Bank Rate from February to May 2015. … MPC Minutes …
22nd October 2014
Lower oil and food prices should provide a timely boost to consumer spending at a time when employment growth has faded and financial asset prices are falling. … Lower commodity prices to bolster consumer …
17th October 2014
Last week saw global financial markets return to panic mode, as concerns about the faltering euro-zone economy, heightened geopolitical risks, the spread of the Ebola virus and falling oil prices came to the fore. Amidst the gloom, however, a piece of …
The latest labour market figures indicated that the economy is finally starting to see the pick-up in productivity that is required for both the recovery to maintain its present momentum and real earnings to increase sustainably. … Labour Market Data …
15th October 2014
September’s sharp fall in consumer price inflation supports those members of the Monetary Policy Committee arguing that there is still no hurry to raise interest rates. … Consumer Prices & Producer Prices …
14th October 2014
September’s BRC Retail Sales Monitor highlighted the diverging prospects for the food and non-food retail sectors. Whilst growth in overall retail spending may have slowed a touch in Q3, it should maintain a decent pace over the next year or so. … BRC …
Concerns that the euro-zone’s faltering recovery will drag the UK’s own into the doldrums appear somewhat overblown. Past experience shows that the UK economy has been able to outperform the euro-zone’s for prolonged periods, and we think that it will …
13th October 2014
On the face of it, the sharp decline in the FTSE 100 to its lowest level since last October appears to be a bad portent regarding the sustainability of the UK economy’s recovery. However, the FTSE’s global orientation means that it is no longer a good …
10th October 2014
Gilt yields have continued to decline over the last month even though the UK’s economic recovery has maintained its healthy pace and overseas residents have been net sellers of gilts this year. The fall in yields seems to have partly reflected a fall in …
9th October 2014
With inflation easing, the housing market cooling and the euro-zone’s recovery fading, the majority of MPC members voting to keep Bank Rate on hold is unlikely to have been whittled down at this month’s meeting. And with inflation set for further …
August’s fairly weak industrial production figures provided further evidence thatthe economic recovery remained unbalanced in the third quarter. Meanwhile, Q3’sCredit Conditions Survey suggested that mortgage lending should pick up soon. … Industrial …
7th October 2014
The sharp decline in the manufacturing PMI and smaller fall in the services PMI in September has led some to question the durability of the UK’s economic recovery. There is little reason to be worried at this stage, though. For one, the broader range of …
3rd October 2014
While the economic recovery seems to have broadly maintained its strong pace in the third quarter, the latest national accounts contained signs that the recovery has exacerbated some of the economy’s existing weaknesses. Indeed, the current account …
