UK Markets Chart Pack Sterling bumping into Brexit ceiling Equity markets have recovered much of their losses in recent weeks and, after hitting multi-year lows at the start of September, sterling and bond yields have also rebounded. (See Chart 1.) This is... 23rd September 2019 · 8 mins read
UK Economics Update MPC unlikely to follow its friends and loosen policy Given the drop in GDP in Q2, the fall in core inflation to an almost 3-year low in August and the ongoing Brexit drama, there was never much chance that the MPC would raise interest rates from 0.75%... 19th September 2019 · 3 mins read
BoE Watch Scope for upside surprise to rate expectations It seems almost certain that the MPC will keep interest rates at 0.75% at its next meeting on Thursday 19th September. The minutes may be slightly more hawkish than they were in August. But the... 12th September 2019 · 9 mins read
UK Economics Chart Pack Avoiding a recession…for now While the 0.2% q/q decline in GDP in Q2 and the further falls in the IHS Markit/CIPS activity PMIs in August mean that there is a real risk of a recession, there are reasons to believe that GDP will... 5th September 2019 · 8 mins read
UK Data Response IHS Markit/CIPS Services & All-Sector PMI (Aug.) The small drop back in the services PMI in August could indicate that the weakness in some parts of the economy is starting to feed through into the services sector. However, the services PMI is still... 4th September 2019 · 2 mins read
UK Economics Weekly US-UK trade deal unlikely to get off the ground We have our doubts that a US-UK trade deal, even a “modular” one, will be easily achievable if there is a no deal Brexit. In any case, the bigger issue will still be the trading relationship between... 23rd August 2019 · 4 mins read
UK Data Response Public Finances (Jul.) The small surplus in July’s public finances wasn’t enough to make up for the jump in borrowing since the start of the financial year and suggests that borrowing will overshoot the OBR’s forecast this... 21st August 2019 · 3 mins read
UK Economics Update What to make of the inverted gilt yield curve The inversion of the yield curve has stoked concerns about the possibility of an imminent recession, if the UK is not already in one. However, even though the downside risks to the economy have... 15th August 2019 · 3 mins read
UK Markets Outlook Global jitters aggravated by no deal fears The global shift away from risky assets and towards safer ones that seems to be underway will either be exacerbated by a no deal Brexit on 31st October or cushioned by a deal or a delay. Although a... 12th August 2019 · 14 mins read
UK Data Response GDP (Q2 First Estimate) The small contraction in GDP in Q2 throws up the spectre of a recession even before Brexit. However, almost all the weakness was because the original Brexit deadline meant that activity that would... 9th August 2019 · 2 mins read
UK Economics Chart Pack Past the worst…for now While it will probably be confirmed later this week that the economy didn’t grow at all in Q2, July’s PMIs provide some support to our view that GDP will rise in Q3. Admittedly, both the manufacturing... 6th August 2019 · 8 mins read
UK Data Response IHS Markit/CIPS Manufacturing PMI (Jul.) The manufacturing PMI remained at 48.0 in July, which was slightly stronger than expected (consensus 47.7), but it still indicates that manufacturing output fell at the start of Q3. However, the... 1st August 2019 · 3 mins read
UK Economics Weekly Javid to loosen fiscal policy, economy has poor start to Q3 It came as no surprise that Boris Johnson became the UK’s new Prime Minister this week. And in his first speech in Parliament on Thursday there was no sign of him rowing back on his campaign pledges... 26th July 2019 · 5 mins read
UK Economics Update Fiscal rules are made to be broken Any spending spree by the new administration will probably be accompanied by a rise in borrowing, which could breach the current fiscal rule, especially if there is a no deal Brexit. However, fiscal... 24th July 2019 · 3 mins read
UK Markets Chart Pack Lingering downside risk to sterling With the pound having recently weakened to a two-year low of $1.24 and the markets seemingly no longer pricing in the possibility of official interest rate hikes if there’s a Brexit deal or delay... 24th July 2019 · 8 mins read
UK Economic Outlook An economic multiverse As Brexit could dramatically alter the near-term outlook for the economy, we are continuing to publish three sets of forecasts based on different Brexit outcomes (deal, no deal and more delays). But... 16th July 2019 · 26 mins read
