UK Economics Weekly Our forecasts in 2025 – Inflation miss, Bank Rate hit At this time of year it is useful to look back at how your forecasts have done and to learn from any mistakes to improve your future forecasts. Both we and the consensus underestimated inflation again... 12th December 2025 · 10 mins read
UK Economics Weekly Minimum wage hike another headwind to employment The 4.1% rise in the minimum wage scheduled for April 2026 will support wage growth, particularly for workers on lower incomes, but by further raising businesses’ labour costs it will probably... 5th December 2025 · 8 mins read
UK Economics Weekly Chancellor puts MPs and the markets ahead of growth In this week’s Budget, the Chancellor pulled off the delicate balancing act of not upsetting Labour MPs, who wanted higher spending, and investors, who wanted to see fiscal discipline. But the... 28th November 2025 · 5 mins read
UK Economics Weekly Reeves and Bailey play conflicting parts in policy pantomime Raising taxes in next Wednesday’s Budget a month before Christmas day will make the Chancellor look like Scrooge. But we now think that, due to the weaker news on activity and inflation in recent... 21st November 2025 · 5 mins read
UK Economics Weekly Risks tilted towards a bigger hit to GDP from UK Budget The risk that the Budget could prove detrimental for GDP has only been heightened by the news that the Chancellor has reportedly decided not to raise income tax in favour of a shopping list of smaller... 14th November 2025 · 9 mins read
UK Economics Weekly Bank Rate in BoE downside scenario looks more convincing The Chancellor gave the biggest hint yet this week that large tax rises are coming in the Budget on 26 th November. Our view that she will raise taxes by around £38bn, which would weigh on inflation... 7th November 2025 · 9 mins read
UK Economics Weekly Chancellor's second Budget to be about as big as her first Reports that the Chancellor will leave herself with more headroom and that the Office for Budget Responsibility will downgrade its productivity forecasts by more than we were anticipating suggest the... 31st October 2025 · 4 mins read
UK Economics Weekly Door nudges open for BoE, but window shut for Chancellor The past two weeks have boosted our confidence in our long-held forecasts that inflation and interest rates will fall further than most expect next year. And while September’s surprisingly soft... 24th October 2025 · 5 mins read
UK Economics Weekly Is this peak inflation? If we’re right in expecting Wednesday’s release to reveal that CPI inflation jumped to more than double the 2.0% target in September, then the UK’s reputation for controlling inflation will be... 17th October 2025 · 9 mins read
UK Economics Weekly Is the Budget already buffeting the economy? The recent poor performance of the housing market and the weakness in consumer and business sentiment probably has more to do with rising inflation, higher mortgage rates and the stuttering jobs... 10th October 2025 · 9 mins read
UK Economics Weekly Will households start spending more soon? It was confirmed this week that consumer spending grew by just 0.1% q/q in Q2. We expect consumer spending growth to accelerate, but there are three growing downside risks to that view - weaker... 3rd October 2025 · 4 mins read
UK Economics Weekly What if Starmer and Reeves are replaced? The government's vulnerability will make the job of stabilising the public finances and boosting economic growth more difficult. It also raises the risk of an altogether worse outcome – a fiscal... 26th September 2025 · 7 mins read
UK Economics Weekly Chancellor’s tricky fiscal situation just got trickier The combination of a likely downgrade to the Office for Budget Responsibility's productivity growth forecast in the Budget on 26th November and the further rise in borrowing costs this week adds to... 19th September 2025 · 6 mins read
UK Economics Weekly Rising inflation expectations adding to the BoE’s nerves The recent rises in households’ inflation expectations will be making the Bank of England more nervous about the outlook for inflation. This feeds into our new forecast that the Bank will keep... 12th September 2025 · 9 mins read
UK Economics Weekly Later Budget may hinder, not help the Chancellor While the Chancellor will be hoping that a later Budget will mean she gets a more favourable set of forecasts from the Office for Budget Responsibility (OBR), we are not convinced. The OBR will still... 5th September 2025 · 7 mins read
UK Economics Weekly Conditions ripe for fiscal crisis, gov’t must not pull the trigger Most of the conditions that have led to fiscal crises in the past are now in place. The missing factor is a trigger. This means that whatever the Chancellor chooses to do in the Autumn Budget, it’s... 29th August 2025 · 5 mins read
