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
UK Economics Weekly Time to throw in the towel on growth? (No) Recent news on the UK economy, including the downward revision to Q4 GDP growth, appears to have lent more support to the consensus forecast of slower growth in 2018 than to our prediction of an... 23rd February 2018 · 1 min read
UK Economics Weekly Should rising domestic inflationary pressure worry the MPC? Inflation proved unexpectedly sticky in January, remaining unchanged at 3.0%, contrary to the consensus expectation for it to fall. However, we don’t think that the Monetary Policy Committee (MPC)... 16th February 2018 · 1 min read
UK Economics Weekly How big a risk to the economy is the market sell-off? While the sell-off in financial markets over the past week or so has been abrupt, we don’t think that it currently poses a big threat to the economic outlook. The relationship between equity prices... 9th February 2018 · 1 min read
UK Economics Weekly Is the MPC about to shorten its horizon? We have long-argued that interest rates would rise somewhat faster, and sooner, than markets expecting. Recent comments by Governor Carney offer tentative support to this view and suggest that... 2nd February 2018 · 1 min read
UK Economics Weekly Can the sterling rally continue? There are some reasons to think that the pound’s recent rally may struggle to go much further. Rising US interest rates could prompt something of a recovery in the ailing dollar, while Brexit... 26th January 2018 · 1 min read
UK Economics Weekly Will the strong pound snuff out the net trade boost? The recent rise in the pound against the dollar to almost $1.40, its highest level since the eve of the EU referendum, raises some concerns that a valuable source of support to economic growth –... 19th January 2018 · 1 min read
