UK Economics Hit to GDP from pingdemic not huge, but unhelpful We estimate that the “pingdemic”, which has contributed to 1.1 million people self-isolating in the week ending 14 th July, could reduce monthly GDP by 0.5-1.0% and is surely exacerbating the current... 23rd July 2021 · 3 mins read
UK Economics IHS Markit/CIPS Flash PMIs (Jul.) The second consecutive decline in the flash composite PMI in July came as no surprise to us as we expected the pace of the economic recovery to naturally slow after the big gains following the... 23rd July 2021 · 3 mins read
UK Economics Retail Sales (Jun.) The underlying trend in retail sales volumes is a bit weaker than the 0.5% m/m rise in June suggests. And other evidence indicates that the resurgence in the virus and the “pingdemic” may have taken... 23rd July 2021 · 2 mins read
UK Economics Public Finances (Jun.) June’s public finances figures provided further evidence that the strong economic recovery is feeding through into lower government borrowing. So despite rising debt service costs, we still think that... 21st July 2021 · 3 mins read
UK Economics Surge in inflation won’t be sustained Our forecast that COVID-19 won’t significantly reduce potential supply means that the economy can run a bit hotter for longer without generating the persistent rise in inflation that would require... 20th July 2021 · 26 mins read
UK Economics New BoE and gilt yield forecasts This week’s signs that two members of the Monetary Policy Committee have become more worried about the upside risks to inflation have led us to bring forward our forecast of when policy will be... 16th July 2021 · 7 mins read
UK Economics Labour Market (May/Jun.) May’s figures paint a picture of a labour market well on its way to recovery and will further fuel concerns about labour shortages and the possible boost to inflation from higher wage growth. But past... 15th July 2021 · 3 mins read
UK Economics Consumer Prices (Jun.) The rise in CPI inflation from 2.1% in May to 2.5% in June was smaller than the leap in US inflation to 5.4% released yesterday, but we think the gap between the two will shrink as inflation in the UK... 14th July 2021 · 3 mins read
UK Economics Less scarring means lower inflation and higher tax revenues The bigger and longer-lasting rises in commodity and component costs means that we now think that CPI inflation will rise to a peak of 4.0% at the turn of the year. But if we are right in thinking the... 9th July 2021 · 6 mins read
UK Economics Monthly GDP & International Trade (May) The easing in the pace of the economic recovery in May suggests that GDP is now more likely to return to the February 2020 pre-pandemic peak in October rather than in August. The bigger point, though... 9th July 2021 · 4 mins read
UK Economics CPI inflation may peak around 4% Bigger rises in commodity and component costs than we had expected mean that we now think CPI inflation will rise from 2.1% in May to a peak of about 4.0% around the turn of the year. But we still... 6th July 2021 · 9 mins read
UK Economics No need to fear as furlough enters final furlong We think that concerns about the winding up of the furlough scheme are overdone for two reasons. First, at the end of May only 2.3m people were on furlough and half of them were working at least some... 2nd July 2021 · 7 mins read
UK Economics GDP (Q1 Final) The small downward revision to Q1 GDP growth probably won’t stop the economy from rising back to its pre-pandemic peak in the coming months. And the larger-than-expected rebound in the household... 30th June 2021 · 3 mins read
UK Economics Recovery evolving rather than stalling The recent softening in some indicators of activity is probably mostly a result of shifts in spending patterns within the economy rather than a sign that the recovery has already stalled. As such, we... 29th June 2021 · 3 mins read
UK Economics Money & Credit (May) The signs that households have started to borrow again provide us with confidence that May’s surprise fall in retail sales was a result of a shift in spending from retailers to other areas as the... 29th June 2021 · 3 mins read
UK Economics MPC more optimistic, but no more hawkish Other than the Monetary Policy Committee noting the growing upside risks to inflation alongside today’s policy decision, there were no real signs that it is thinking about tightening policy sooner, à... 24th June 2021 · 3 mins read
