UK

UK Data Response

UK Data Response

Money & Credit (Oct.)

The rise in consumer credit in October adds to evidence that economic activity fared well at the start of Q4. But that no longer offers much comfort in light of the discovery of the new Omicron variant. While much remains uncertain, the risks to our (already subdued) GDP forecast appear to the downside.

29 November 2021

UK Data Response

IHS Markit/CIPS Flash PMIs (Nov.)

The composite activity PMIs hardly changed in November as the economy held up fairly well despite continued supply disruptions and shortages. Meanwhile, signs that price pressures continued to grow suggests that a hike to Bank Rate in December still looks like the most likely outcome.

23 November 2021

UK Data Response

Retail Sales (Oct.)

The rebound in retail sales in October adds to the evidence that activity held up well in October and will raise expectations that the Bank of England will hike interest rates from 0.10% to 0.25% in December.

19 November 2021
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UK Data Response

Public Finances (Oct.)

The winding down of the furlough scheme helped to bring down public sector net borrowing in October. But we doubt that the public finances will get much help from faster GDP growth in the near term.

19 November 2021

UK Data Response

Consumer Prices (Oct.)

When coupled with yesterday’s decent labour market release, the bigger-than-expected leap in CPI inflation in October makes an interest rate hike in December even more likely. That said, we still think the markets have gone too far by pricing in interest rates rising to 1.00-1.25% by the end of next year.

17 November 2021

UK Data Response

Labour Market (Sep./Oct.)

This labour market release is the first of two before the Bank of England’s December policy meeting and it suggests that the labour market remained tight after the furlough scheme ended. If the story is similar in the next release on 14th December, then we think the Bank will raise interest rates on 16th December.      

16 November 2021

UK Data Response

GDP (Sep. & Q3)

The economy regained some momentum in September, but continued shortages and the drag on real incomes from higher utility prices probably mean it will soon fizzle out. That’s one reason why we doubt that the Bank of England will raise interest rates above 0.50% next year.

11 November 2021

UK Data Response

Money & Credit (Sep.)

The tepid rise in consumer credit lends support to our view that economic growth slowed to little more than a crawl in September. Against the backdrop of rising COVID-19 cases and higher inflation, we expect consumer spending growth to remain fairly weak in the coming months.

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