Data still consistent with soft landing

UK Economics Weekly

Is the UK enjoying ‘Goldilocks’ conditions?

The good news just kept coming this week. The economy grew at an above-trend rate for the second quarter in a row in Q2, the unemployment rate fell to 4.2%. At 2.2%, CPI inflation is only a touch...

16th August 2024 · 6 mins read

UK Economics Rapid Response

UK Retail Sales (Jul. 2024)

After a weather disrupted Q2, July’s 0.5% m/m rise in retail sales volumes (consensus forecast 0.6% m/m, CE forecast 0.5% m/m) was largely driven by two sectors and only partially reversed June’s 0.9%...

16th August 2024 · 3 mins read

Asset Allocation Update

Gilt yields and sterling may have further to fall

While expectations for interest rates in the UK have already fallen by 40bp by end-2025 since mid-July, our projections for UK CPI inflation to remain below the 2% target for much of 2025 and 2026...

15th August 2024 · 3 mins read

UK Housing Market Chart Pack

UK Housing Market Chart Pack (Aug. 2024)

Our UK Housing Chart Pack has been updated with the latest data and our analysis of recent developments. The recent drop in mortgage rates has caused house prices to rise a bit faster than expected...

15th August 2024 · 1 min read

UK Housing Market Update

Revising up our 2024 house price forecast

Given the revival in house prices and recent falls in mortgage rates, we are raising our Q4 2024 house price growth forecast from 1.0% y/y to 2.0%. We now think that the number of housing transactions...

15th August 2024 · 4 mins read

UK Economics Rapid Response

UK GDP (Jun. & Q2 2024)

While the economy flatlined in June, it still managed to grow by 0.6% q/q rise in GDP in Q2. That said, some of the rebound in activity in Q2 may have been due to catch-up growth following the...

15th August 2024 · 3 mins read

UK Commercial Property Update

Retail investment will continue to lead the recovery

Commercial property investment is on track to hit our forecast for a rise of 20% this year, helped by a substantial rise in retail transactions. A decent rental growth outlook coupled with attractive...

14th August 2024 · 3 mins read

UK Economics Rapid Response

UK Consumer Prices (Jul. 2024)

The smaller-than-expected rise in CPI inflation from 2.0% in June to 2.2% in July (consensus forecast 2.3%, Capital Economics 2.1%, Bank of England 2.4%) and the sharp fall in services inflation from...

14th August 2024 · 3 mins read

UK Economics Rapid Response

UK Labour Market (Jun. 2024)

The further easing in wage growth will be welcomed by the Bank of England as a sign that labour market conditions are continuing to cool. This lends some support to our forecast that the Bank of...

13th August 2024 · 3 mins read

UK Economics Weekly

Strong rebound in housing activity an upside risk to GDP

Our forecast implies that the recovery in the housing market will both directly and indirectly add about 0.8% to the level of GDP by the end of 2026. But the risk is that the housing market rebound is...

9th August 2024 · 11 mins read

UK Housing Market Update

RICS Residential Market Survey (Jul. 2024)

Increasing demand points to stronger price growth Tentative signs from July’s RICS survey add to the growing evidence that demand and prices are starting to pick up. And as lenders start to cut...

8th August 2024 · 3 mins read

UK Economics Chart Pack

UK Economics Chart Pack (Aug. 2024)

At its last policy meeting, the Bank of England still sounded a long way from being assured that inflation and wage growth will continue to ease. As a result, we doubt the recent moves in global...

7th August 2024 · 1 min read

UK Commercial Property Valuation Monitor

UK Commercial Property Valuation Monitor (Q3 24)

A rise in alternative asset yields combined with stable property yields meant valuations failed to improve in Q2. But with risk-free rates now falling back and property yields set to be flat, property...

7th August 2024 · 0 mins read

UK Economics Update

Growth upgrade suggests UK no longer such a laggard

The news that the economy may now be 2.6% bigger than its Q4 2019 pre-pandemic size, rather than 1.8%, suggests it is in better shape than we previously thought. But with the UK still suffering from...

7th August 2024 · 3 mins read