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One explanation for the relatively small drop in employment during this recession is the muted pickup in company insolvencies. But a number of factors could prompt insolvencies to rise further, meaning that some of the fall in employment associated with …
7th October 2010
August’s UK industrial production figures confirmed that, for now at least, the manufacturing sector continues to defy the gathering gloom over the broader economic outlook. But industry’s resilience may not last much longer. … Industrial Production …
The hefty drop in the Halifax measure of house prices adds weight to the view that house price weakness is far from over. To our minds, weak housing market activity indicators mean that further falls in house prices are likely. … Halifax House Prices …
September’s CIPS/Markit Report on Services should, for now at least, ease fears about the risk of a double-dip in the economy. But double-dip or no double-dip, the recovery appears to have a lost a significant amount of momentum. … UK CIPS/Markit Report …
5th October 2010
He may have put it a little bluntly, but our sympathies are with Charlie Bean with respect to the comments he made about savers in an interview with Channel Four last week. Encouraging people to save less, and to spend more, is what the MPC has been doing …
4th October 2010
September’s UK CIPS/Markit report on manufacturing provided further evidence that the recovery in both the industrial sector and the wider recovery is fading fast. … UK CIPS/Markit Report on Manufacturing …
1st October 2010
The recovery is still losing momentum, with the CIPS/Markit surveys indicating that growth may grind to a complete halt by the end of the year. (See Chart.) Admittedly, the economy now seems slightly better balanced than it looked before, with investment …
30th September 2010
The Bank of England’s latest survey suggested that while credit conditions are continuing to thaw, the process remains very gradual. We do not expect lending growth to pick up pace any time soon. … Credit Conditions Survey …
Signs that the economic recovery is fading have prompted the Monetary Policy Committee(MPC)to move slightly closer to providing the economy with more stimulus. Indeed, a three way split vote looks likely this month. … MPC edging towards more …
House prices were more or less stable in September. Although it may appear that prices are stagnating at the moment, the renewed falls in mortgage market activity suggest that further declines in prices are on their way. … Nationwide House Prices …
Underlying broad money growth still looks very weak – supporting MPC member Adam Posen’s view that more quantitative easing (QE) will be required in order to boost money and credit growth and hence support overall economic activity. … Monetary Indicators …
29th September 2010
The latest mortgage lending statistics from the Bank of England show that mortgage market activity weakened once again in August. Declining buyer demand means that approvals could drop even further from here. … Mortgage Lending …
The Monetary Policy Committee (MPC) may soon relaunch its programme of quantitative easing (or QE). But this time around, the Committee could buy a rather wider range of assets. … What else can the MPC …
28th September 2010
Q2’s national accounts and balance of payments figures brought mixed signals on the fundamental health of the UK economy. There are still good reasons to be concerned over the sustainability of the recovery. … National Accounts & Balance of Payments …
After the recent run of better-than-expected news on the public finances, August’s terrible borrowing figures provided a timely reminder of the scale of the fiscal challenge that lies ahead. … Fiscal strains yet to …
27th September 2010
The Minutes of September’s MPC meeting suggested that the arguments proposed by doves on the Committee are gaining greater currency with the other members. The chances of additional monetary policy stimulus in the form of more QE have increased …
22nd September 2010
August’s public finances figures severely dented hopes that the fiscal position is on a clearly improving trend and cast doubt on the ability of the Government to deliver the fiscal tightening laid out in the June Budget. … Public Finances …
21st September 2010
Last week’s consumer prices figures showing headline inflation holding steady at 3.1% fuelled doubts in some quarters over the MPC’s long held view that spare capacity in the economy will have a strong downward influence on inflation over the medium term. …
20th September 2010
Even if employment is not actually rising quite as quickly as the official figures suggest, the improvement in the jobs market has been pretty impressive. Unfortunately, this looks unlikely to last. … Is employment really rising that …
17th September 2010
August’s fall in retail sales volumes tentatively suggested that the surprising resilience of consumer spending of late could be coming to an end. … UK Retail Sales …
16th September 2010
The pressures on consumers are mounting, with a weakening housing market now adding to the mix. And the drop in the official measure of retail sales in August suggests that consumers might finally be succumbing to these pressures – although other measures …
The latest UK labour market figures showed that while employment is still rising strongly, cracks are appearing in the recovery. We still expect unemployment to rise to 3m or so within the next two or three years. … UK Labour Data …
15th September 2010
Net trade is yet to make a positive contribution to GDP growth during this recovery – in part due to particularly strong import growth. While this is partly a welcome reflection of the recovery in domestic demand, it also looks like the weaker pound is …
14th September 2010
This report is only available as a PDF. Click to download. … UK Consumer Prices (Aug.) …
Tomorrow’s inflation figures are likely to show that a further rise in food prices stopped headline inflation from falling more sharply – or at all – in August. However, we doubt that rising food prices materially raise the chances either of a rise in …
13th September 2010
Last week brought the first ‘hard’ data relating to the third quarter. Its overall message seems to be that, while growth has not fallen ‘off a cliff,’ it has probably slowed sharply since the rapid expansion seen in the second quarter. … Early signs of …
August’s UK producer prices figures brought further tentative evidence that cost pressures at the start of the inflation pipeline are beginning to ease. … Producer Prices …
10th September 2010
Growing signs that the UK’s recovery has begun to falter have been met by markedly different reactions from the bond and equity markets. While real yields in the gilt market have fallen to record lows, equity markets have continued to recover over the …
9th September 2010
While the MPC predictably chose to leave policy unchanged again today, growing signs that the economic recovery is running out of steam suggest that a further bout of quantitative easing - socalled “QE2” - will be launched later this year or early in …
This report is only available as a PDF. Click to download. … QE2 being readied for launch …
July’s dreadful trade figures cast further doubt over the ability of the external sector to drive the recovery once the boost from government and consumer spending fades. … UK Trade …
rally in the pound has fizzled out over the last few weeks. But with concerns over the euro-zone likely to re-surface before too long and the UK set to press ahead with a decisive fiscal tightening, the pound could yet make further considerable gains …
8th September 2010
July’s manufacturing output figures defied the rather gloomier tone of some of the recent industrial surveys. Still, there are good reasons to expect the industrial recovery to lose at least some steam over the coming months. … UK Ind. Production …
The latest rise in the Halifax measure of house prices does little to settle the debate about the house price outlook. But the fact that house prices continue to fall on a quarterly basis seems consistent with our forecast of considerable weakness in …
The apparent lack of a “plan B” for the public finances should the economy be weaker than the Government expects supports our forecasts of sluggish growth and further monetary loosening. … "Plan B" is to bank on the …
6th September 2010
With the economic recovery flagging, attention is turning to what further support policymakers can provide. While there are question marks over whether further central bank asset purchases would actually do any good, we think that the Monetary Policy …
Last week didn’t look likely to be a particularly memorable one as far as domestic news is concerned. But it’s just possible that it will turn out to be the week when the threat of a renewed recession in the UK economy first started to look very real. … …
August’s CIPS/Markit Report on Services echoed the sister reports on manufacturing and construction already released this week in signalling a sharp slowdown in growth across the economy. The dangers of a double-dip are growing alarmingly. … UK …
3rd September 2010
There are still few signs that the Monetary Policy Committee (MPC)about to change policy in either direction any time soon. We expect interest rates and the asset purchase programme to be left unchanged again at the forthcoming meeting. … MPC stays …
2nd September 2010
The renewed downturn in house prices signalled by today’s Nationwide index is unlikely to be short-lived. Not only is the market still significantly overvalued on most measures, but the lack of mortgage credit and the weak economic outlook also point to …
October’s rise in the Halifax house price index was widely expected, given the size of the previous month’s drop. Moreover, although far stronger than consensus estimates for a 0.6% rise, the underlying trend still points to accelerating house price …
While the economy expanded strongly in the second quarter, further signs have emerged that growth has since slowed. And the breakdown of Q2 GDP casts additional doubt over the sustainability of the recovery. (See Chart.) Growth was driven by re-stocking, …
1st September 2010
