UK Economics Economic recovery enters a more challenging phase The economy is entering a more challenging phase of its recovery from the pandemic as it is having to deal with another rise in COVID-19 cases and both product and labour shortages. We think the... 10th September 2021 · 7 mins read
UK Economics GDP & International Trade (Jul.) The rise in COVID-19 cases and the product/labour shortages are probably behind the stalling in the UK’s economic recovery in July. With next week’s CPI release set to reveal a jump in inflation from... 10th September 2021 · 4 mins read
UK Economics Shortages stifling activity and boosting inflation The broadening of the recent product and labour shortages appears to be holding back activity and adding to the upward pressure on inflation. The risk is twofold. First, these shortages may prevent... 9th September 2021 · 8 mins read
UK Economics Government leaves itself with some fiscal ammo to utilise later The net effect of today’s announcements on social care reform may provide a very small boost to GDP. But perhaps more important is that by funding more spending on social care by raising taxes, the... 7th September 2021 · 3 mins read
UK Economics HGV labour shortages won’t drive interest rates up next year Reports that shortages of heavy good vehicles (HGV) drivers have become more acute and have raised drivers’ pay will do little to ease fears that higher wage growth could persistently lift CPI... 3rd September 2021 · 3 mins read
UK Economics Money & Credit (Jul.) The latest money and credit figures do little to ease mounting concerns that the resurgence in virus cases in July and so-called “pingdemic” brought the consumer recovery to a halt. 31st August 2021 · 3 mins read
UK Economics Inflation expectations – what to watch The inflation expectations of households, businesses and the financial markets will probably rise in the coming months as actual CPI inflation jumps to over 4.0% later this year. But as the rises are... 25th August 2021 · 4 mins read
UK Economics Retail Sales & Public Finances (Jul.) While there was good news on public borrowing, the slump in retail sales added to other evidence indicating that in July the economic recovery slowed to a crawl. 20th August 2021 · 3 mins read
UK Economics Consumer Prices (Jul.) July’s drop in CPI inflation is likely to be followed by sharp rises in the next few months, taking inflation to a peak of about 4.5% by the end of the year. But provided the spike in inflation does... 18th August 2021 · 3 mins read
UK Economics Labour Market (Jun./Jul.) The latest batch of data brought signs that labour shortages are feeding through into higher pay growth in certain sectors. But underlying pay pressures were reasonably contained overall, and we... 17th August 2021 · 3 mins read
UK Economics June’s resilience won’t last as virus disruptions hit The 1.0% m/m rise in GDP in June was an impressive result. But we suspect that GDP growth in Q3 will be closer to 2.0% q/q than the 2.9% q/q forecast by the Bank of England. And we still think that... 13th August 2021 · 8 mins read
UK Economics GDP & International Trade (Jun. & Q2) The media headlines have focused on the big 4.8% q/q gain in GDP in Q2, following Q1’s 1.6% q/q fall. But the real news was the unexpectedly strong growth in June which suggested that the recovery... 12th August 2021 · 4 mins read
UK Economics Recovery becoming more tepid With a whopping 1.0 million people on average having been asked by the NHS App or Test & Trace system to self-isolate in July, the “pingdemic” is likely to have stifled the economic recovery in recent... 11th August 2021 · 9 mins read
UK Economics Inflation expectations & pay growth key to policy tightening A bumper rise in utilities prices in October could contribute to CPI inflation climbing to a 10-year high of 4.4% in November. But as we don’t expect higher CPI inflation to feed through into higher... 3rd August 2021 · 5 mins read
UK Economics Divisions emerge, but early end to BoE’s asset purchases unlikely While the Bank of England will upgrade its near-term forecasts for inflation in its Monetary Policy Report (MPR) published on 5 th August, it will probably still judge that the rise is transitory. And... 29th July 2021 · 9 mins read
UK Economics Money & Credit (Jun.) The money and credit data showed that consumers were willing to take on more debt in June. However, with consumers accumulating excess savings at a faster pace, there were signs that the resurgence in... 29th July 2021 · 3 mins read
