Strikes won’t reduce activity in December by much

The strikes in December won’t help the economy when it is probably already in recession. But we think real GDP may only be around 0.0-0.5% lower in December than otherwise. More important may be larger pay rises on the back of the strikes possibly leading to wage growth being stronger than otherwise, which might mean inflation takes longer to fall back to the 2.0% target.

We will be discussing the decisions of the BoE, the Fed and the ECB in a Drop In on Thursday 15th December at 3pm GMT. (Register here.)