UK Economics Update Are the UK’s financial ties with Hong Kong a concern? The UK has significant financial ties to Hong Kong, and the recession and correction in house prices we are forecasting there will put the territory’s financial sector under pressure. However, only a... 23rd September 2019 · 3 mins read
UK Economics Weekly The MPC tanker is turning In recent years the economy has been moving towards full capacity, but at this week’s meeting the Monetary Policy Committee (MPC) judged that it has changed direction and slack is now opening up... 20th September 2019 · 6 mins read
UK Economics Update Government to win from RPI reforms, bondholders to lose The decision to reform the RPI measure of inflation at some point between 2025 and 2030 could reduce RPI inflation by a little under 1ppt a year. That could give the Government a windfall of about £3... 20th September 2019 · 3 mins read
UK Data Response Retail Sales (Aug.) Following two consecutive monthly gains, a fall in sales in August was always likely. In the event, sales fell by 0.2% m/m (consensus 0.0%, Capital Economics -0.5%) which dragged annual sales growth... 19th September 2019 · 2 mins read
UK Data Response Consumer & Producer Prices (Aug.) It is possible to put a lot of the fall in inflation in August down to clothing and computer game prices, which are volatile. But there’s no denying that overall inflation is strikingly weak given... 18th September 2019 · 2 mins read
UK Economics Update Student loans the last nail in the coffin of the fiscal rule The implementation of a change to how student loans are classified in the public finances, on top of a jump in government spending so far this year and the 2019 Spending Round, means the Government’s... 16th September 2019 · 3 mins read
UK Economics Update Brexit – What next? When the Brexit process comes to a head in October the economy could shift onto a new trajectory. This Update sets out the key events that could affect which of our forecasts the economy follows. 10th September 2019 · 4 mins read
UK Economics Chart Pack Avoiding a recession…for now While the 0.2% q/q decline in GDP in Q2 and the further falls in the IHS Markit/CIPS activity PMIs in August mean that there is a real risk of a recession, there are reasons to believe that GDP will... 5th September 2019 · 8 mins read
UK Economics Update Key points on the next general election If Parliament moves to rule out a no deal Brexit this week, a general election seems on the cards either before or after a delay to Brexit. With the Conservatives ahead in the polls, a no-deal Brexit... 4th September 2019 · 3 mins read
UK Data Response IHS Markit/CIPS Manufacturing PMI (Aug.) The fall in the manufacturing PMI in August to its lowest level since July 2012 suggests the industrial sector has continued to contract. But we doubt that manufacturing will pull the overall economy... 2nd September 2019 · 3 mins read
UK Economics Update Will manufacturing drag the economy into recession? While much of the sharp contraction in manufacturing in the second quarter can be put down to Brexit distortions, a meaningful recovery is unlikely given the ongoing struggles of global manufacturing... 19th August 2019 · 3 mins read
UK Economics Weekly Is the UK different? Whereas US yield curve inversions are close to a fool-proof predictor of US recessions, a recession in the UK has only followed inversions in the gilt yield curve on 50% of occasions. That’s not... 16th August 2019 · 5 mins read
UK Data Response Labour Market (Jun.) The labour market has shrugged off the 0.2% q/q fall in GDP in Q2, providing support to our view that the economy will recover in Q3. Indeed, employment rose by 115,000 on the quarter (consensus +60... 13th August 2019 · 2 mins read
UK Markets Outlook Global jitters aggravated by no deal fears The global shift away from risky assets and towards safer ones that seems to be underway will either be exacerbated by a no deal Brexit on 31st October or cushioned by a deal or a delay. Although a... 12th August 2019 · 14 mins read
UK Economics Chart Pack Past the worst…for now While it will probably be confirmed later this week that the economy didn’t grow at all in Q2, July’s PMIs provide some support to our view that GDP will rise in Q3. Admittedly, both the manufacturing... 6th August 2019 · 8 mins read
UK Data Response IHS Markit/CIPS Services & All-Sector PMI (Jul.) The low level of the PMI surveys, particularly for construction and manufacturing, is consistent with the economy struggling in the aftermath of the original Brexit date. But there was some... 5th August 2019 · 2 mins read
