UK Economics Update Bulk of fiscal squeeze yet to come The recent slowdown in the pace of recovery is probably due in part to the fiscal tightening measures that have already been put in place. But with the bulk of the government spending cuts yet to come... 12th May 2011 · 1 min read
UK Economics Update Case for a rate hike weakening Given the dismal state of the recovery, it was hardly a surprise that the Monetary Policy Committee kept interest rates on hold today. Most forecasters have reacted to the recent run of weaker news by... 5th May 2011 · 1 min read
UK Economics Update Pay settlements provide little cause for concern It is often assumed that the fiscal squeeze is driving the current weakness of consumer spending and that government measures – such as a VAT cut – are all that are needed to get the consumer recovery... 5th May 2011 · 1 min read
UK Economics Update Monetary Indicators Monitor (Apr.) Monetary indicators continue to show that broad money growth is exceptionally weak, consistent with inflation eventually falling sharply in the medium term. 4th May 2011 · 1 min read
UK Economics Update Are the trade figures better than they look? Rising commodity prices have been boosting import values, meaning that the underlying trade deficit is not quite as bad as the headline figures suggest. Nonetheless, this goes only some of the way to... 19th April 2011 · 1 min read
UK Economics Update Weak economic news could yet stave off a rate hike There had been little to suggest that the Committee had altered its view since the last meeting, so the no-change decision today was of little surprise. However, the next meeting – coinciding with May... 7th April 2011 · 1 min read
UK Economics Update Next wave of fiscal tightening hits households The next wave of the fiscal consolidation will hit households this week on so-called “worse off Wednesday”, the first day of the new financial year. We expect the net impact of the main measures... 4th April 2011 · 1 min read
UK Economics Update Monetary Indicators Monitor (Mar.) The latest set of monetary indicators add to the reasons to think that medium-term price pressures in the economy are still very weak and that inflation will therefore fall back next year. 29th March 2011 · 1 min read
UK Economics Update UK Budget Checklist 2011 This checklist is intended to help clients keep track of the important measures and numbers announced during the Chancellor’s Budget speech at 12.30pm and to provide some instant context. 23rd March 2011 · 1 min read
UK Economics Update Weak economic news could yet stave off a rate hike With the economic outlook little clearer than when it last met, it was never that likely that the Monetary Policy Committee would act today. We still think that the chances of an interest rate rise in... 10th March 2011 · 1 min read
UK Economics Update How worrying is the rise in companies' price expectations? Concerns about the knock-on effects of the rise in inflation on inflation expectations tend to focus on the expectations of households and financial markets. But of most direct importance for the... 2nd March 2011 · 1 min read
UK Economics Update Monetary Indicators Monitor (Feb.) The MPC’s preferred measure of broad money growth has continued to accelerate and is now getting pretty close to the rates the Committee has been aiming for. However, we doubt that this growth can be... 1st March 2011 · 1 min read
UK Economics Update A strong recovery needs faster money growth The Monetary Policy Committee has suggested that nominal GDP growth can be sustained even if money growth remains weak. This might happen to some extent. But the big picture is that money growth at... 28th February 2011 · 1 min read
UK Economics Update How would a rate rise affect confidence? In this morning’s MPC minutes, the Committee voiced some concern about how a rate rise might affect consumer confidence. The relationship between interest rates and consumer confidence has weakened... 23rd February 2011 · 1 min read
UK Economics Update Fears of rising pay settlements overdone Tentative evidence of a rise in pay settlements has raised concerns that the much-feared wage-price spiral is kicking off. However, we remain sanguine about the outlook for pay growth and continue to... 21st February 2011 · 1 min read
UK Economics Update Funding problems to keep lid on bank lending The Chancellor is upping the pressure on banks to lend more. But with banks’ funding problems really coming home to roost this year, he might soon feel like he is banging his head against a brick wall... 14th February 2011 · 1 min read
