UK Economics Weekly Forecasting a parallel universe In our latest UK Economic Outlook, “An economic multiverse” (16th July), we set out the different paths politics could send the economy down. The MPC took a different approach this week, forecasting... 2nd August 2019 · 8 mins read
UK Economics Weekly Javid to loosen fiscal policy, economy has poor start to Q3 It came as no surprise that Boris Johnson became the UK’s new Prime Minister this week. And in his first speech in Parliament on Thursday there was no sign of him rowing back on his campaign pledges... 26th July 2019 · 5 mins read
UK Economics Weekly OBR’s no deal warning, signs of life on the high street The Office for Budget Responsibility’s (OBR) public finance forecasts in a no deal scenario published in its Fiscal Risks Report this week really do look pretty dreadful. We suspect they overdo the... 19th July 2019 · 5 mins read
UK Economics Weekly Prospect of higher interest rates drifting further away Despite the rebound in monthly GDP growth from -0.4% m/m in April to +0.3% m/m in May, the economy probably just about contracted in Q2 as a whole. Some of that is just payback from activity being... 12th July 2019 · 8 mins read
UK Economics Weekly Markets pricing in a cut – deal or no deal While the financial markets are right to expect interest rates to be cut if there is a no deal Brexit, we think they have gone too far by pricing in the possibility that rates will be reduced if a no... 5th July 2019 · 7 mins read
UK Economics Weekly Possible contraction in Q2, all roads lead to a fiscal loosening The chances of the economy escaping a quarterly contraction in Q2 seem to be receding in light of the latest surveys and official data. While a contraction in Q2 would generate many headlines, it... 28th June 2019 · 6 mins read
UK Economics Weekly MPC singing a different tune The MPC struck a markedly more dovish tone in the statement and minutes of June’s meeting compared to May’s. This was partly due to a weakening global and domestic outlook, but the rising chances of a... 21st June 2019 · 1 min read
UK Economics Weekly Economy off to a bad start in Q2, Johnson takes the lead Even if some of the weakness in activity in April comes back in May, GDP growth will still struggle to hit the Bank of England’s Q2 forecast of 0.2%. As such, we doubt that they will raise rates at... 14th June 2019 · 1 min read
UK Economics Weekly Theresa May’s economic legacy Economic growth was virtually the same in Q1 2019 as it was in Q2 2016 when Theresa May came to power. However, the UK has still underperformed the G7 average. And given that it looks increasingly... 7th June 2019 · 1 min read
UK Economics Weekly Economy struggles to maintain its pace, race for No. 10 The economic news for Q2 so far has been pretty poor. And we wouldn’t be too surprised if Q1’s expansion is the fastest rate of growth that the economy can muster for some time. Meanwhile, the ever... 31st May 2019 · 1 min read
UK Economics Weekly Prime Minister May falls, CPI inflation rises The announcement by the Prime Minister that she will resign appears to have generated even more political uncertainty for the Bank of England to deal with. The Bank will be thankful, then, that... 24th May 2019 · 1 min read
UK Economics Weekly Brexit sabbatical drawing to a close If you have been enjoying the respite from incessant Brexit headlines over the past few weeks, I’m afraid it’s bad news. This week’s fall in the pound to a three-month low of $1.28 reflects Brexit... 17th May 2019 · 1 min read
UK Economics Weekly Grey clouds on the horizon for the labour market Preparations for the moving target of Brexit day flattered the Q1 GDP figures and therefore could give way to a hangover in Q2. But this should just be a timing effect. How the labour market performs... 10th May 2019 · 1 min read
UK Economics Weekly MPC takes a hawkish turn, Brexit hangover in Q2 The most surprising news from the Bank of England’s Inflation Report this week was not the suggestion that interest rates need to rise more quickly than the markets currently anticipate, but the... 3rd May 2019 · 1 min read
UK Economics Weekly Fall in borrowing, rise in inflation, local elections looming The recent rise in oil prices adds to our view that inflation is likely to be higher over the next couple of years than is widely expected. This only increases the chances that, eventually, the Bank... 26th April 2019 · 1 min read
UK Economics Weekly Beautifully behaved The unemployment rate is close to the natural rate, inflation is close to the target and GDP growth is close to the economy’s potential rate, but interest rates are well below most estimates of the... 18th April 2019 · 1 min read
