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The message from August’s CIPS/Markit Report on manufacturing that the recovery in the industrial sector is losing steam supports our view that overall economic growth is likely to disappoint again in the coming quarters. … CIPS/Markit Report on …
1st September 2010
The Bank of England’s mortgage lending statistics for July showed a marginal rise in both the value and volume of mortgages approved. However, the bigger picture is still of subdued activity in the housing market. There is little chance of a marked …
31st August 2010
Firms’ pension funds are still not looking particularly healthy. And a renewed slowdown in the economy could offset any benefits to pension schemes from proposed changes in inflation rules. … Pension funds vulnerable to renewed economic …
The pick-up in the Monetary Policy Committee’s preferred measure of money supply growth has continued to fade. With bank lending so weak, the improvement never looked likely to last. … Monetary Indicators Monitor …
After a weak start to the year, the subsequent modest improvement in the housing market has recently begun to peter out. It may be that this is nothing to worry about, especially given that the wider economic environment has become more supportive. But we …
30th August 2010
The second estimate of UK GDP revealed that the economy expanded even more quickly than previously estimated in the second quarter. But the figures cast further doubt on the sustainability of the recovery. … GDP: Output, Income and Expenditure …
27th August 2010
Our long-standing bullishness on UK government bonds (or gilts) was further borne out last week when ten year yields slipped through our target of 3%. Gilts have been supported by overseas developments, but market worries over the domestic inflation …
23rd August 2010
Not only did the latest UK data suggest that the fiscal position is tentatively improving, but it looks like the slowdown emerging in the wider economy has not spread to the high street yet. … UK Retail Sales & Public Finances …
19th August 2010
The recovery in the overall economy appears to be softening. And although the high street appears to doing well for now, we doubt that consumer spending will be far behind. Consumer confidence appears to be on a downward trend. And the improvement in the …
The minutes of August’s Monetary Policy Committee (MPC) meeting suggested that policy is unlikely to change – in either direction – for some time yet. But we still think that a further policy loosening is likely, perhaps at the start of next year. … MPC …
18th August 2010
July’s consumer prices figures should provide some reassurance that underlying price pressures in the UK economy are finally starting to ease. … UK Consumer Prices …
17th August 2010
July’s consumer prices figures should provide some reassurance that underlying price pressures in the UK economy are finally starting to ease. … Core price pressures finally starting to …
The distinctly dovish tone of last week’s August Inflation Report begs the question of whether the Monetary Policy Committee is damaging the credibility of the policy framework by deliberately turning a blind eye to persistently strong price pressures. … …
16th August 2010
On the whole, markets have so far shrugged off recent concerns over a double-dip in the UK and global economies. Equity prices have recovered sharply over the last couple of months, partly on encouraging news on corporate earnings, while sterling has …
12th August 2010
The Bank of England’s August Inflation Report confirmed that the MPC still expects inflation to fall back sharply once temporary upward forces fade. As such, a policy loosening still looks more likely than a tightening in the foreseeable future. … Bank of …
11th August 2010
The latest UK labour market figures showed that employment is rising strongly now that the wider economic recovery has gained some momentum. But the looming fiscal squeeze suggests that this will be only a brief respite. … UK Labour Data …
June’s trade figures were better than expected, but it still looks unlikely that the external sector will be able to offset the weakening already emerging on the consumer side of the economy. … UK Trade (Jun.) & BRC Retail Sales Monitor …
10th August 2010
The interim results published by the major UK banks last week showed that RBS and Lloyds are on track to meet their new lending commitments to the Government. But these lending targets have become pretty meaningless. The big picture is that net lending to …
9th August 2010
The latest data on UK industry suggest that, for now at least, both activity and cost pressures in the sector remain pretty strong. But there are good reasons for expecting both to weaken somewhat over the coming months. … UK Ind. Production (Jun.) & …
6th August 2010
Recent economic data have continued to paint a mixed picture on the health of the UK economy. While the 1.1% quarterly rise in GDP in Q2 has increased the chance that annual GDP growth will be closer to 1.5% than 1% this year, the timelier activity …
5th August 2010
Today’s decision to leave interest rates on hold again presumably reflected growing signs that the recovery in the UK and global economies is running out of steam. With an enormous fiscal squeeze ahead, we still expect monetary policy to stay extremely …
July’s UK CIPS/Markit report on services provided further evidence that the economic recovery has cooled since the strong 1.1% quarterly rise in GDP in Q2. … UK CIPS/Markit Report on Services …
4th August 2010
House prices rose in July, reversing some of the recent falls. But this does not alter our view that prices are set for a period of considerable weakness in the remainder of this year and into 2011. … Halifax House Prices …
You could be forgiven for being puzzled by the recent data on consumers. After all, figures released last week on retail spending and the housing market gave markedly different signals on the current health of and outlook for household spending. … How …
2nd August 2010
The economy managed a much stronger than expected expansion in the second quarter, with GDP rising by 1.1%. (See Chart.) However, this is likely to be as good as it gets for this stage of the economic recovery. Timelier measures of activity such as the …
July’s UK CIPS/Markit report on manufacturing brought further evidence that the recent impressive recovery in the industrial sector of the economy is beginning to lose a little bit of steam. … CIPS/Markit Report on Manufacturing …
The subdued picture of lending activity was reinforced today as mortgage approvals for house purchase recorded their largest fall for five months. Although we doubt approvals will fall significantly further from here, we see little immediate prospect of a …
29th July 2010
The recent pick-up in the Monetary Policy Committee’s favoured measure of the money supply may already be fading. Meanwhile, bank lending is still struggling to rise. … Monetary Indicators Monitor …
The drop in the Nationwide house price index in July was hardly a surprise given the generally downbeat signs from other housing market data over the past few weeks. But it adds to the growing body of evidence that the past year’s house price gains have …
There are still few signs that Andrew Sentance’s view that interest rates need to rise is gathering much support from the rest of the Monetary Policy Committee (MPC). In fact, the minutes of the last meeting contained the strongest steer for a while that …
The renewed falls in mortgage market activity are weighing on house prices. With lending unlikely to pick up significantly this year, due to constraints on both supply and demand, recent falls in house prices are unlikely to prove short-lived. … Mortgage …
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 UK banks look likely to receive a relatively clean bill of health in the stress tests, tha is unlikely to have much of an impact on the outlook for the economy. After all, while recent weeks have seen some signs of renewed concerns over the …
26th July 2010
Today’s paper on financial regulation beefs up the Government’s plans to expand the Bank of England’s toolkit. But there are still big uncertainties about how this will operate in practice, while the paper on company finance underlines that there is no …
The UK economy grew significantly more quickly than expected in the second quarter of the year. But there are still good reasons to expect the recovery to be pretty lacklustre in the coming quarters. … Preliminary GDP …
23rd July 2010
Recent press reports have suggested that the Government may be considering an early sale of some of its banking sector assets. However, any sales are unlikely to improve the fiscal outlook and may make the aim of boosting bank lending harder to achieve. … …
22nd July 2010
Consumers do not appear to have let concerns about the fiscal squeeze affect their spending too much yet. Nonetheless, there are some signs that the spending recovery is starting to lose momentum. And the sheer scale of the looming tax rises and …
June’s official retail sales figures suggested that the prospect of the sharpest fiscal tightening in decades hasn’t stopped consumers spending yet. But we doubt that this strength can last. … Retail Sales …
This report is only available as a PDF. Click to download. … MPC Minutes (Jul.) …
21st July 2010
June’s public finances figures put something a dent in recent hopes that the fiscal position is now on a clearly improving path. … Public Finances …
20th July 2010
Last week’s rise in core inflation suggested that the spare capacity in the economy still isn’t having much of an impact. Core goods inflation is now on a downward trend – but is being offset by a rise in services inflation. … Pick-up in services …
19th July 2010
Once again, recent market movements appear to have been partly shaped by events in the eurozone, where bouts of both optimism and nervousness surrounding the current stress tests on banks and the health of the euro-zone public finances have coincided with …
16th July 2010
One of the Government’s biggest economic challenges is getting the banks to lend more, with the major banks reportedly meeting with the Chancellor today to discuss the issue. In the near-term, this is likely to involve toughening up the lending targets …
15th July 2010
