Government support for employment fading

The government is removing some of its support to employment. The national furlough ends on the 31st October and the new Job Support Scheme is less generous and narrower. As a result, the pace of the fall in employment will soon speed up.
Andrew Wishart Property Economist
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UK Economics Weekly

Pay growth less inflationary than it looks, England v Scotland

The recent jump in pay growth has mainly been driven by base and compositional effects and is therefore less inflationary than it appears at first glance. That’s one reason why we think inflation will fall back below 2.0% next year and why the MPC won’t raise interest rates until 2025. Meanwhile, if economic variables are anything to go by, England may win tonight’s Euro 2020 clash with Scotland 2:1.

18 June 2021

UK Data Response

Retail Sales (May)

Rather than suggest the economic recovery is already spluttering, the decline in retail sales in May is probably just a result of the reopening of indoor hospitality in mid-May prompting households to spend less time shopping and more time socialising.

18 June 2021

MPC Watch

No tightening until 2024, and then by unwinding QE first

Even though the Monetary Policy Committee (MPC) will probably acknowledge in the policy announcement on Thursday 24th June that activity and inflation have been stronger than it expected, we don’t think it will suggest it is any closer to tightening policy. While the markets expect that policy will be tightened in late 2022, we don’t think the MPC will get to that stage until 2024. And when it does, we suspect it will unwind some quantitative easing before raising interest rates in 2025.

17 June 2021

More from Andrew Wishart

UK Housing Market Update

Should we be worried about rental arrears?

The early evidence suggests that the end of the evictions moratorium will not result in a huge wave of evictions. And while the end of the furlough scheme presents a risk, we suspect that the easing of restrictions will have allowed the economy to recover enough by that point to keep tenants in both their jobs and their homes.

11 June 2021

UK Housing Market Data Response

RICS Residential Market Survey (Dec.)

Sales and prices rose further in December, but there were clear signs that momentum was waning even before the new lockdown was imposed. Indeed, with the end of the stamp duty holiday looming, most surveyors now expect prices to fall. We forecast a 5% drop in house prices this year.

11 June 2021

UK Housing Market Data Response

RICS Residential Market Survey (May)

The looming end of the stamp duty holiday has only applied the slightest dab to the brakes of the housing market thus far. But while the new buyer enquiries started to ease, sales instructions fell more sharply suggesting that strong demand relative to supply will continue to push up house prices in the near term.

10 June 2021
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