UK Economics Weekly Should we be worried by softer pay growth? We had expected the recent upward trend in nominal pay growth to come to a brief halt in April due to unfavourable base effects. But the drop in the annual growth rate of average earnings (excluding... 15th June 2018 · 1 min read
UK Economics Weekly Stronger data keeps August hike on the cards Economic growth of 0.4% or so in Q2 – as suggested by the latest business surveys – would normally be pretty respectable. But coming after Q1’s snow-related slowdown, it looks a little soft. What’s... 8th June 2018 · 1 min read
UK Economics Weekly Italian troubles shouldn’t worry the MPC While the fall in gilt yields over the past fortnight partly reflects an increase in safe haven demand, expectations for future interest rates have also slipped back. It seems unlikely, though, that... 1st June 2018 · 1 min read
UK Economics Weekly Early signs of a consumer revival Annual consumer spending growth ground to its slowest pace in six years in Q1. Alongside a string of weak early indicators of spending in Q2, that called into question our forecast of a rebound in... 25th May 2018 · 1 min read
UK Economics Weekly How long will the strength in jobs growth last? This week’s figures suggested that the labour market is in rude health. Admittedly, some of the timelier measures of employment growth have started to weaken. And with the labour market now... 18th May 2018 · 1 min read
UK Economics Weekly MPC unlikely to wait too long After the sea of downbeat economic news in recent weeks, the Monetary Policy Committee (MPC)’s decision to keep rates unchanged at its meeting in May came as little surprise. Of course, the MPC’s... 11th May 2018 · 1 min read
UK Economics Weekly Drilling down into construction’s weak start to the year The slowdown in quarterly GDP growth in Q1 begs the question whether the economy is too fragile to withstand a tightening in monetary policy anytime soon. But the slowdown was almost entirely due to... 4th May 2018 · 1 min read
UK Economics Weekly Why did the OBR get its fiscal forecasts so wrong? This week’s public finances figures showed that borrowing for the full 2017/18 financial year came in at £42.6bn, a whopping £16bn lower than that predicted by the Office for Budget Responsibility... 27th April 2018 · 1 min read
UK Economics Weekly Does falling inflation support or undermine case for rate hike? On the face of it, the fall-back in inflation in March has reduced the chances of a hike in interest rates in May. And Governor Carney’s comments appear to add weight to this view. However, an... 20th April 2018 · 1 min read
UK Economics Weekly Softer data probably won’t deter MPC The recent run of weak data suggests that a hike in Bank Rate, to 0.75% in May, is far from a done deal. But we don’t think that a May hike is now off the table. Some of the unexpected weakening in... 13th April 2018 · 1 min read
UK Economics Weekly Should we worry about the softening in the surveys? About a month ago, we warned that the severe weather around the start of March would make the economy look a bit fragile in Q1. Indeed, the weaker-than-expected services PMI survey, released this week... 6th April 2018 · 1 min read
UK Economics Weekly Will trade fears dent growth? The recently announced US tariffs should have a limited direct effect on the UK economy. Admittedly, falls in equity prices – on the back of concerns over a full-blown trade war – could clearly have... 29th March 2018 · 1 min read
UK Economics Weekly How far and how fast will interest rates rise? With another hike in interest rates in May now largely priced into markets (and supported by this week’s Monetary Policy Committee (MPC) Minutes), the bigger question is just how “limited and gradual”... 23rd March 2018 · 1 min read
UK Economics Weekly The OBR is still too gloomy Following November’s Autumn Budget, we argued that the Office for Budget Responsibility (OBR) had become too pessimistic about the outlook for economic growth. Although the economy has performed... 16th March 2018 · 1 min read
UK Economics Weekly Severe weather won’t cool growth in Q1 The likely dent to retail sales, spending on consumer services and construction output as a result of February’s bad weather will make the economy look fragile. But the hit to the economy will be... 9th March 2018 · 1 min read
UK Economics Weekly Manufacturing recovery has further to run Recent data have raised fears that the long-awaited recovery in the manufacturing sector is coming to an end before it really had a chance to get going. One possible explanation for the recent... 2nd March 2018 · 1 min read
