UK Economics Update Bank of England unlikely to take rates negative We think it is far more likely that the Bank of England will use further rounds of Quantitative Easing to boost demand rather than cut interest rates into negative territory as the market is... 14th May 2020 · 3 mins read
UK Markets Outlook Policy to anchor gilt yields and to buoy equities As a protracted economic recovery from the coronavirus crisis will force the Bank of England to keep interest rates close to zero and further expand its quantitative easing programme, gilt yields will... 14th May 2020 · 12 mins read
UK Economics Weekly Credit won’t hold back the recovery, more to come from BoE There can be little doubt about how bad the recession will be now that the Bank of England has joined us and the OBR in forecasting that GDP will fall by 25-30%. But even so UK banks should be able to... 7th May 2020 · 8 mins read
UK Data Response IHS Markit/CIPS All-Sector PMI (Apr.) The collapse in the construction PMI in April confirms that no sector of the economy has been spared from the slump in activity. 6th May 2020 · 3 mins read
UK Economics Chart Pack Past the nadir, but normal a long way off While the latest data suggest that our estimate that GDP has fallen by an eyewatering 25% from peak to trough is in the right ballpark, it looks as though the most restrictive parts of the coronavirus... 5th May 2020 · 9 mins read
UK Data Response Insolvencies (Q1) The drop in both the number of corporate and individual insolvencies in Q1 is unlikely to be maintained over the next few months as the collapse in revenues and employment caused by the coronavirus... 30th April 2020 · 2 mins read
UK Economics Update Bank loan losses to approach GFC levels We estimate that banks will have to absorb about £50bn of loan losses from corporate and household defaults as a result of the coronavirus crisis. If anything, the risks are for even bigger losses... 29th April 2020 · 3 mins read
UK Data Response Retail Sales (Mar.) The 5.1% m/m fall in retail sales volumes in March was the largest on record and suggests that household consumption declined by at least 4% q/q in Q1. However, as the corona virus lockdown was only... 24th April 2020 · 2 mins read
UK Data Response Public Finances (Mar.) & DMO Gilt Issuance Despite the slight deterioration in March, the budget deficit was still only £48.7bn (2.1% of GDP) in 2019/20, but it will soon surge next year. The government measures to combat the economic fallout... 23rd April 2020 · 3 mins read
UK Markets Chart Pack Market functioning restored, but risks remain Strains in the financial markets have generally eased due to policymakers’ decisive action and equity markets have rebounded on hopes that the spread of the coronavirus is slowing. Of course, asset... 21st April 2020 · 7 mins read
UK Economic Outlook Economy will struggle to get back to full health We think it will take the economy a few years to recover from an unprecedented hit to GDP of around 25% triggered by the lockdown implemented to contain the coronavirus. That’s because despite the... 16th April 2020 · 22 mins read
UK Economics Update Business insolvencies to reach same level as the GFC The number of business insolvencies could reach the same level as in the Global Financial Crisis over the next few years, keeping the unemployment rate high and holding back the economic recovery. 8th April 2020 · 3 mins read
UK Economics Weekly Government schemes falling down in practice Despite policymakers’ best efforts, it is looking more likely that the unemployment rate and businesses insolvencies could rise as high as in the Global Financial Crisis. 3rd April 2020 · 7 mins read
UK Economics Chart Pack Economic costs of lockdown will be huge It’s become clearer that the economic costs of the lockdown to contain the coronavirus will be huge. The plunge in the activity PMIs in March provide some tentative support to our view that GDP could... 2nd April 2020 · 9 mins read
UK Economics Update TV the biggest winner of lockdown Most of the high frequency indicators we track show how the coronavirus lockdown is significantly reducing activity. The exception is the activity of watching TV, which is surging. This too, of course... 31st March 2020 · 2 mins read
UK Data Response Business & Consumer Confidence (Mar.) The relatively small fall in the European Commission’s Economic Sentiment Indicator (ESI) for the UK is mainly because the survey was done prior to the UK going into a full lockdown. A much sharper... 30th March 2020 · 3 mins read
