UK Economics Weekly Heatwaves pose bigger risks to inflation than activity Heatwave-related impacts on near-term activity are likely to be sector-specific, short-lived, and therefore have only a small influence on aggregate GDP. This summer’s scorching temperatures pose a... 14th August 2026 · 8 mins read
UK Economics Weekly Manufacturing revival not just a stockbuilding story After four years of near-continuous contraction, the industrial sector is getting back on its feet. While this revival largely reflects the temporary prop from precautionary stockbuilding after the... 7th August 2026 · 5 mins read
UK Economics Weekly Probability of BoE interest rate hikes may be starting to shrink Despite the Bank of England maintaining its hiking bias on Thursday, it feels as though the Bank is edging further away from interest rate hikes as it comes round to our view that the weak labour... 31st July 2026 · 4 mins read
UK Economics Weekly Two mounting upsides to our inflation and interest rate forecasts The recent rebound in oil and gas prices and the prospect of looser fiscal policy under the new Burnham government suggests the risks to our forecast for GDP to grow by 1.0%, CPI inflation to fall to... 24th July 2026 · 4 mins read
UK Economics Weekly Burnham inherits economic resilience that won’t last The recent resilience of the UK economy is unlikely to last in the second half of the year when the full effects of higher energy prices are felt. Further ahead, Andy Burnham is unlikely to achieve a... 17th July 2026 · 10 mins read
UK Economics Weekly Tentative housing recovery a positive sign for wider economy We still think CPI inflation will rise from 2.8% in May to a peak of around 3.5% in early 2027 and that the resulting drag on real activity has yet to come. But tentative signs of a turnaround in the... 10th July 2026 · 6 mins read
UK Economics Weekly Burnham on the defensive, it’s markets not rules that matter How to achieve the government’s commitment to raise defence spending to 3.5% of GDP by 2035 will be a far bigger problem for prospective PM Burnham than the £4.7bn defence “black hole”. And a bit of... 3rd July 2026 · 4 mins read
UK Economics Weekly Devolution does not guarantee economic growth The political appeal of more devolution is clear, but the economic benefits are not. So should Andy Burnham become Prime Minister and pursue devolution, he may accrue some political points but the UK... 26th June 2026 · 4 mins read
UK Economics Weekly A new PM won’t change the fiscal realities Andy Burnham's decisive Makerfield by-election victory has taken him one step closer to 10 Downing Street, but a change in Prime Minister won't change the fiscal realities. While there may be talk of... 19th June 2026 · 6 mins read
UK Economics Weekly BoE may not follow the crowd, Starmer playing defence An interest rate hold next Thursday looks nailed on and there are good reasons why the Bank of England may not join the central bank hiking club this year. Meanwhile, the political row over defence... 12th June 2026 · 8 mins read
UK Economics Weekly BoE may not follow the ECB The latest evidence appears to support our view that the weakness of the labour market will prevent the second-round inflation effects that the Bank of England fears. If so, then the Bank of England... 5th June 2026 · 6 mins read
UK Economics Weekly Peaks in petrol prices and mortgage rates may be in the past The recent falls in oil prices and swap rates suggest that the peaks in petrol prices and mortgage rates may be behind us. While that doesn't mean inflation won't rise and the economy won't weaken... 29th May 2026 · 4 mins read
UK Economics Weekly Labour market too weak to generate big second-round effects We have been saying for some time that the current economic backdrop is much less conducive to a long-lasting bout of inflation than it was in 2022. This week’s news only adds to that feeling. As a... 22nd May 2026 · 4 mins read
UK Economics Weekly Political uncertainty may stifle economy for rest of the year The way things are going at the moment, it is possible that we won't know whether or not Starmer will be removed as Prime Minister and, if he is, who will replace him until mid-August. And if there is... 15th May 2026 · 10 mins read
UK Economics Weekly Political change won’t alter economic and fiscal constraints Once a fuller picture of the results emerges later today and tomorrow, yesterday’s local elections could be historic as it could bring an end to Starmer’s tenure as Prime Minister and highlight that... 8th May 2026 · 6 mins read
UK Economics Weekly Three key points when swimming in a sea of scenarios Energy prices are currently a bit higher than those incorporated into our baseline scenario and the Bank of England’s scenarios A and B, which increases the chances of the Bank of England raising... 1st May 2026 · 4 mins read
