My subscription
...
Filters
My Subscription All Publications

Virus-hit global demand to weigh on the UK

The failure of the Chinese economy to recover promptly from the measures put in place to contain the coronavirus means that world demand growth will be softer than we had anticipated this year, but probably a bit stronger next year. As a result, we have downgraded our 2020 UK GDP growth forecast from 1.0% to 0.8% and upgraded our 2021 forecast from 1.8% to 2.0%. A widespread outbreak in Europe, the US, and the UK remains a risk to our forecast.
Andrew Wishart Property Economist
Continue reading

More from UK

UK Economics Chart Book

Increased risk of “second-round” effects

We’ve been warning for some time that CPI inflation would rise further than most people expect, triggering a recession. The prospect of even bigger rises in utility prices on 1st October and in the first half of 2023 than we have pencilled in suggests that the risks to our forecast for CPI inflation to rise from June’s 40-year high of 9.4% to 12.5% in October are now skewed to the upside. That increases the risk of bigger, longer-lasting second-round inflation effects. Admittedly, there have been some encouraging signs that price pressures towards the start of the inflation pipeline have passed their peak. But it is worrying that domestic inflationary pressures, such as those in the services sector, are still rising, as they tend to last longer. As a result, we still think that the Bank of England will raise interest rates from 1.75% to 3.00% even when the economy is in recession.

10 August 2022

UK Economics Update

Rising interest costs will add to the pain for households

A rise in Bank Rate to a peak of 3.00% wouldn’t dent real consumer spending anywhere near as much as the drag from surging inflation over the coming quarters. That said, it would only compound the downward impact on spending, which reinforces our view that the economy will fall into a recession.

9 August 2022

UK Economics Weekly

What the BoE told us and what it didn't

We have been saying for some time that despite a recession, the Bank of England would be forced to raise interest rates. The Bank of England's signal that it is stepping up the fight against high inflation despite its forecast that the UK economy is headed for a recession brought it closer in line with our view. We haven't changed our forecast that rates will rise to a peak of 3.00% and stay there until well into 2024. But we now think the risks are skewed towards interest rates being cut sooner.

5 August 2022

More from Andrew Wishart

UK Housing Market Update

Should we be worried about rental arrears?

The early evidence suggests that the end of the evictions moratorium will not result in a huge wave of evictions. And while the end of the furlough scheme presents a risk, we suspect that the easing of restrictions will have allowed the economy to recover enough by that point to keep tenants in both their jobs and their homes.

11 June 2021

UK Housing Market Data Response

RICS Residential Market Survey (Dec.)

Sales and prices rose further in December, but there were clear signs that momentum was waning even before the new lockdown was imposed. Indeed, with the end of the stamp duty holiday looming, most surveyors now expect prices to fall. We forecast a 5% drop in house prices this year.

11 June 2021

UK Housing Market Data Response

RICS Residential Market Survey (May)

The looming end of the stamp duty holiday has only applied the slightest dab to the brakes of the housing market thus far. But while the new buyer enquiries started to ease, sales instructions fell more sharply suggesting that strong demand relative to supply will continue to push up house prices in the near term.

10 June 2021
↑ Back to top