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The Monetary Policy Committee’s decision not to extend its quantitative easing programme further this month does not necessarily mark the end of its extraordinary efforts to support the economy. And any tightening of policy conditions remains a long way …
4th February 2010
Halifax data for January confirmed that the housing market upturn was extended into 2010, but also indicated that it may be losing steam. Indeed, prices rose at their slowest rate since June. Admittedly, this is in stark contrast to last week’s Nationwide …
This report is only available as a PDF. Click to download. … Halifax House Price Index (Jan) …
We estimate that the car scrappage scheme has boosted UK GDP by just 0.1% or so per quarter. Nonetheless, the end of the scheme could still dent growth if consumers brought forward spending to take advantage of the scheme. And the expiry of overseas …
January’s CIPS/Markit report on services suggested that the economic recovery is struggling to maintain even the meagre momentum it built up at the end of last year. … UK CIPS/Markit Report on Services …
3rd February 2010
The UK finally emerged from recession in the last quarter of last year, but by the skin of its teeth. GDP posted a quarterly rise of just 0.1%, comparing poorly to the initial rises in output seen in other economies when they recently exited recession. …
2nd February 2010
It has now been almost a year since the Bank of England started its quantitative easing (QE) programme of asset purchases, yet both the broad money supply and bank lending are still barely rising. … Monetary Indicators Monitor …
1st February 2010
January’s CIPS report on manufacturing offered hope that the industrial recovery is gathering momentum. But there are still major uncertainties over the outlook for the overall economy over the coming quarters. … CIPS/Markit Report on Manufacturing …
It was bad enough that the UK was one of the last major economies to pull out of recession, but we also now know that it saw a particularly feeble post-recession bounce. One reason is that big exporters such as Germany are enjoying a temporary boost from …
The upward momentum in house prices evident at the end of last year was extended into January. Indeed, the Nationwide house price index rose at its fastest rate for four months. But with each rise denting affordability and making it harder for buyers to …
29th January 2010
This report is only available as a PDF. Click to download. … Nationwide house prices (January) …
The Monetary Policy Committee (MPC) faces a particularly tricky task when it meets this month. On the one hand, the economy only just limped out of recession at the end of last year. But on the other, inflation is rising more sharply than expected. On …
28th January 2010
Q4’s disappointing GDP figures have raised fresh questions over the possibility of a “double-dip” in the economy and the implications for the timing and outcome of the forthcoming general election. … Will a “double-dip” sink Mr …
Markets continue to expect official interest rates in the UK to be raised from around the middle of 2010. No doubt the recent pick-up in inflation – as well as speculation that the Bank’s programme of quantitative easing will not be extended in February – …
27th January 2010
The UK economy finally exited recession in Q4 last year, but at a snail’s pace. With households under pressure, credit in short supply and a fiscal squeeze looming, the path back to pre-recession levels of activity will be a long and bumpy one. … …
26th January 2010
The pound’s recent climb to a four month high against the euro has revived memories of sterling’s major appreciations ahead of the last two changes of government back in 1979 and 1997. We do not envisage a sterling rally on the same scale, if only because …
25th January 2010
As we expected, consumer spending picked up pace towards the end of December. Not only do consumers tend to do their Christmas shopping later and later, but the VAT rise encouraged them to bring some spending forward. That said, the modest rise in the …
22nd January 2010
December’s modest rise in the official measure of retail sales was disappointing given the far more upbeat tone of the surveys and trading updates. Although the figures should not be taken as gospel, they were a timely reminder that UK consumers should …
December’s public finances figures will do little to ease the pressure for a major fiscal tightening after the general election. But at least the manufacturing sector finally seems to be benefiting from the lower pound. … Public Finances & CBI Industrial …
21st January 2010
While analysis of the influence of the general election on economic policy has focused on the size and timing of the fiscal tightening, the conduct of monetary policy could also be affected. But whatever the election outcome, we expect monetary policy to …
20th January 2010
The minutes of January’s Monetary Policy Committee (MPC) meeting suggested that the Committee is unlikely to change policy either way next month. Meanwhile, the mixed labour market data highlighted the fragile nature of the economic recovery. … MPC …
December’s consumer prices figures will clearly do nothing to ease the recent increase in inflation worries. But they should not throw the Monetary Policy Committee into a blind panic. … UK Consumer Prices …
19th January 2010
From what we can tell so far, the high street has had a surprisingly good Christmas – and not just due to people trying to beat the VAT rise. We have had our fingers burnt before in betting agains UK consumers. But even so, we find it hard to see how they …
18th January 2010
With roughly as many settlements taking place in January as in the entire second half of the year, the start-of-year pay round will give us a steer as to whether or not pay growth is stabilising along with the wider economy. We still think that the labour …
14th January 2010
November’s industrial production figures suggested that, while activity in the manufacturing sector has stabilised after the steep falls of the previous year or two, a return to strong and sustained rates of expansion remains some way off. … UK Industrial …
13th January 2010
The UK trade figures continued to disappoint in November, with the lower pound still having little visible positive effect. But at least consumers are still proving surprisingly happy to keep spending on the high street. … UK Trade (Nov.) & BRC Retail …
12th January 2010
Uncertainties over the likely path of the economic recovery suggest that the timing of the general election might have an important influence on its outcome. Should Mr Brown hang on to the last in the hope that the recovery steadily gathers pace? Or go …
11th January 2010
Last week’s news, all but confirming that the deepest peacetime recession on record finally came to an end in the fourth quarter of last year, suggests that the economy started 2010 with a reasonable amount of forward momentum. … 2010 – A bumpy road to …
December’s producer prices figures revealed a further pick-up in cost pressures in the industrial sector. But this is unlikely to prevent consumer price inflation from falling back sharply later on this year. … Producer Prices …
8th January 2010
The sharp rise in household saving suggests that the required adjustment in the consumer sector is further advanced than previously thought. However, we think that the process still has further to go. … Consumer adjustment not over …
7th January 2010
The Monetary Policy Committee (MPC) remains firmly in wait and see mode until its February meeting. While the quantitative easing programme may be drawing to a close, other measures to support the economy are yet possible and any real tightening of …
The latest rise in house prices has not changed our view that a second leg in the house price correction still lies ahead. Admittedly, the timing of any renewed fall in prices is uncertain. But given the still weak outlook for unemployment and wage …
This report is only available as a PDF. Click to download. … Halifax House Price Index (Dec) …
December’s CIPS/Markit report on services provided further evidence that the economy moved decisively out of recession in the fourth quarter. However, the recovery is likely to struggle to maintain its recent momentum. … UK CIPS/Markit Report on Services …
6th January 2010
The National Accounts published at the end of last year left the economy looking better-balanced than before. The balance of payments deficit should have recorded the smallest deficit last year since 1998, while the household saving rate rose above its …
Growing concerns over the UK’s fiscal position are unlikely to ease this side of the general election and could well intensify further. But the prospect of a long period of very low inflation and interest rates should limit the damage to the bond market …
5th January 2010
The Monetary Policy Committee (MPC) is likely to wait for February’s Inflation Report before reviewing its asset purchase programme. Interest rates and the £200bn quantitative easing programme are therefore likely to be left unchanged at this week’s …
4th January 2010
Broad money growth remains disappointingly sluggish given the large amount of money the Bank of England has pumped into the economy. And while lenders claim to be expanding the supply of credit, lending growth itself remains weak and is likely to …
December’s data on industry and the housing market suggest that the UK economy ended last year with reasonable momentum. Nonetheless, 2010 is likely to be a year of gradual recovery, rather than booming growth. … CIPS/Markit Report on Manufacturing …
This report is only available as a PDF. Click to download. … National Accounts & Balance of Payments (Q3) …
22nd December 2009
Conditions in the banking sector have been improving, but in its latest Financial Stability Report (FSR), the Bank of England echoed our view that banks still have a lot more work to do in repairing their balance sheets. We still doubt that bank lending …
18th December 2009
This report is only available as a PDF. Click to download. … Public Finances & Money Supply (Nov.) …
It does not appear to have been a spectacular run-up to Christmas on the high street so far. But with the Chancellor confirming that VAT will return to 17.5% on 1st January, we should see an end-of-year surge as people bring forward some spending. This …
17th December 2009
This report is only available as a PDF. Click to download. … UK Retail Sales (Nov.) & CBI Dist. Trades (Dec.) …
