UK Economics Retail Sales (Dec.) The fall in retail sales volumes in December was bigger than expected and supports our view that the Omicron outbreak in the run-up to Christmas may have dragged down GDP by 0.5% m/m, if not more. 21st January 2022 · 2 mins read
UK Economics Real wage squeeze unlikely to be a rerun of 2008-14 The looming squeeze on real wages means that the near-term outlook for consumption and GDP has weakened. That said, we don’t expect anything as bad as the squeeze in 2008-14. In fact, real household... 20th January 2022 · 4 mins read
UK Economics Consumer Prices (Dec.) After rising from 5.1% in November to 5.4% in December, CPI inflation is now further above the Bank of England’s target than at any point since the UK first adopted an inflation target in October 1992... 19th January 2022 · 3 mins read
UK Economics Labour Market (Nov./Dec.) The labour market appears to have tightened after the end of the furlough scheme and at the start of the Omicron wave. So even though real wages are now falling and will decline further, we still... 18th January 2022 · 3 mins read
UK Economics Ramifications could be bigger if PM stays than if he goes The growing uncertainty over the Prime Minister Boris Johnson's position is unlikely to dent economic activity. Arguably, though, if a leadership challenge is avoided or Boris Johnson wins it, the... 14th January 2022 · 7 mins read
UK Economics GDP & International Trade (Nov.) Although the effects of the Omicron COVID-19 wave will probably mean that the economy falls back below its pre-pandemic peak by January after having surpassed it for the first time in November, that... 14th January 2022 · 4 mins read
UK Economics Inflation won’t be the fiscal boon many assume While the general perception is that higher inflation is unambiguously good for the public finances, the reality is a bit more nuanced. The Chancellor will almost certainly be gifted with a lower... 12th January 2022 · 4 mins read
UK Economics Six key calls and three risks for the UK in 2022 Our new forecasts for 2022 envisage CPI inflation rising further than most expect to a peak of 7% and the Bank of England raising interest rates quicker, from 0.25% now to 1.25% by the end of the year... 6th January 2022 · 4 mins read
UK Economics A catch-up on COVID Given the huge surge in cases throughout December, the COVID-19 situation is once again set to be the biggest determinant of the performance of the economy over the first few months of 2022. We aren’t... 5th January 2022 · 4 mins read
UK Economics GDP (Q3 2nd Estimate) Today’s release indicates the economy had a bit less momentum in Q3 than we had previously thought. And, with early signs the Omicron variant has hit activity, growth is sure to have slowed further in... 22nd December 2021 · 3 mins read
UK Economics Public Finances (Nov.) The rise in government borrowing in November suggests the public finances could be already starting to feel the strain from higher spending on NHS Test & Trace and booster vaccines. Now that tighter... 21st December 2021 · 3 mins read
UK Economics MPC begins lift-off but rates unlikely to soar The surprise hike in interest rates by the Bank of England today, from 0.10% to 0.25%, could just be a case of the Bank moving a bit quicker than expected, but the hawkish tone of the commentary... 16th December 2021 · 3 mins read
UK Economics IHS Markit/CIPS Flash PMIs (Dec.) The fall in the composite PMI in December doesn’t come as much of a surprise given the surge in cases of the Omicron variant of COVID-19. But it was much bigger than expected, and shows that caution... 16th December 2021 · 3 mins read
UK Economics Consumer Prices (Nov.) Inflation is close to being further above the target than at any point since the UK started targeting inflation in October 1992. This makes tomorrow’s interest rate decision look closer, but on... 15th December 2021 · 3 mins read
UK Economics December looking dismal, but lockdown the real risk Reports that the surge in Omicron COVID-19 cases is causing some people to stay away from work, schools, pubs and restaurants increases the downside risks to our December and January GDP forecasts... 14th December 2021 · 3 mins read
UK Economics Labour Market (Oct./Nov.) Even though the fallout after the furlough scheme was smaller and shorter than the Bank of England had feared, concerns over the deteriorating COVID-19 situation will probably prevent it from raising... 14th December 2021 · 3 mins read
