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November’s household borrowing figures will help to assuage fears that the slowdown in the housing market is gathering pace. And with consumers’ appetite for unsecured loans remaining strong, this provides another reason to think that consumer spending …
4th January 2018
The rise in December’s Markit/CIPS services PMI provides some reassurance that the economy did not lose pace at the end of the year, following the disappointingly-weak manufacturing and construction surveys. And looking ahead, we expect the economy to …
December’s Markit/CIPS manufacturing survey suggests that the sector provided valuable support to GDP growth in Q4. … Markit/CIPS Manufacturing PMI …
2nd January 2018
While the latest Quarterly National Accounts has raised further questions about the sustainability of consumer spending growth, we think that consumers will continue to ride out the real pay squeeze well. … Consumer spending …
22nd December 2017
Christmas has come early with the ONS’ annual data deluge before the festive break. The upward revision to annual growth paints 2017 in a better light, while the latest data provided a more balanced growth picture for the third quarter. … Quarterly …
November’s public finances figures brought more good news on the current health of the public finances. And we think that stronger GDP growth will result in a more rapid improvement further ahead. … Public Finances …
21st December 2017
The slight fall in the GfK/NOP measure of consumer confidence in December is not cause for alarm. Indeed, the forward-looking balances were unchanged. And with inflation now likely to be at its peak, the squeeze on real wages should abate over the course …
This time last year, the consensus view was that the UK economy would grow by only 1% or so in 2017. But it now looks as though the economy will expand by a more reasonable 1.5%. Of course, there is a possibility that the negative effects of …
20th December 2017
The robust CBI Distributive Trades survey for December suggests that November’s strength in the official retail sales figures should be sustained in the final month of the year. … CBI Distributive Trades Survey …
December’s CBI Industrial Trends Survey painted a mixed picture for the manufacturing sector, with output expectations remaining weak despite order books continuing to swell. … CBI Industrial Trends Survey …
18th December 2017
The EU Council’s decision to sign off “sufficient progress” opens the door to agreeing a transition period, which would see the UK remain in the Customs Union and Single Market until 2021, early next year. But determining post-transition arrangements is …
15th December 2017
With inflation rising above 3% in November, there are some reasons to think that it has now reached a peak. It remains the case that the primary driver of the rise in inflation has been the slide in sterling. However, its impact does appear to be fading, …
With real incomes under pressure from subdued nominal pay growth and rising inflation, the strong rise in retail sales volumes in November is encouraging. However, spending on the high street might have come at the expense of non-retail spending. And in …
14th December 2017
As was widely expected, December’s Monetary Policy Committee meeting was a bit of a non-event. However, if we are right in expecting the economy to perform more strongly than the MPC expects, that should allow interest rates to be raised several more …
The official retail sales figures suggest that “Black Friday” discounts provided a significant boost to high-street spending in November. But consumers may now have done the bulk of their Christmas shopping, meaning that December’s sales could be weak. … …
While the 56,000 fall in employment in the three months to October was larger than the consensus expectation of a 40,000 drop, employment looks unlikely to continue to fall for much longer. Meanwhile, pay growth showed some tentative signs of a pick-up. … …
13th December 2017
While CPI inflation was higher than the consensus forecast and the MPC’s expectation in November, it has probably now peaked. As a result, there is little need for the MPC to raise interest rates again quickly in order to stamp out inflationary pressures. …
12th December 2017
There have been encouraging signs that stronger growth in manufacturing is helping to offset the slowdown in the consumer-facing parts of the services sector. Indeed, according to the Markit/CIPS surveys, other than brief periods in late-2007 and in 2011, …
8th December 2017
With the European Commission satisfied that “sufficient progress” has been made on the first phase of the Brexit negotiations, an important milestone on the road to Brexit has been reached. There are still many obstacles to overcome, but this supports our …
While the flurry of UK activity data was fairly disappointing, the industrial sector still looks on course to provide solid support to growth in Q4. … Industrial Production, Construction & Trade …
While the MPC is extremely unlikely to raise interest rates again at its meeting on 14th December, the key question is whether any of the nine committee members will vote for another hike so soon after the first rate rise in a decade in November. … MPC to …
7th December 2017
The Office for National Statistics confirmed that GDP grew by 0.4% in Q3 and the economy appears to have maintained its recent momentum so far in the fourth quarter. Indeed, November’s Markit/CIPS activity surveys indicate that quarterly GDP is on course …
5th December 2017
November’s set of Markit/CIPS surveys provide reassurance that the economy has held on to its recent momentum in the fourth quarter so far, rather than slowing any further. … Markit/CIPS Services PMI …
November’s BRC Retail Sales Monitor suggested that the real income squeeze may be constraining households’ discretionary purchases. But with inflation set to drop back in 2018, the outlook for consumer spending looks a bit brighter. … BRC Retail Sales …
While the UK Government’s revised offer on the financial settlement with the EU is a positive step forwards, it is not sufficient alone to progress negotiations to the next phase. Meanwhile, if payments are spread over many years then the macroeconomic …
1st December 2017
A slowdown in investment growth is one of the main factors underpinning the consensus expectation for economic growth to slow in 2018. That comes despite the fact that ordinary drivers of investment suggest that it will put in a decent performance. …
The rise in inflation, primarily driven by sterling’s post-referendum slide, has taken its toll on consumer spending growth this year. However, we think that the worst of the real pay squeeze has probably now passed. With consumer confidence still solid, …
November’s Markit/CIPS manufacturing survey suggests that growth in the sector has accelerated further and provides encouraging signs that this strength will be maintained in the coming months. … Markit/CIPS Manufacturing PMI …
Expectations that the growth of the UK economy will slow further in 2018 appear to assume that Brexitrelated uncertainty will have a more damaging impact next year. But there is a growing chance that uncertainty will ease, perhaps helping growth to speed …
30th November 2017
November’s GfK/NOP survey suggested that consumers have become a bit more pessimistic in the runup to Christmas, perhaps reflecting the first rise in interest rates in a decade. But as the squeeze on real earnings eases, there should be scope for …
October’s household borrowing figures showed that slowing housing demand has continued to weigh on mortgage approvals. But there were few signs that consumers’ appetite for unsecured loans is fading. … Household Borrowing Monitor …
29th November 2017
The Bank of England’s Financial Policy Committee (FPC) gave a fairly upbeat assessment of the banking system in November’s Financial Stability Report that suggests that the financial sector would remain resilient and bank lending wouldn’t grind to a halt …
28th November 2017
While the Chancellor gave households something to cheer in last week’s Budget, the big picture is that austerity still has further to run. Moreover, the OBR’s new-found pessimism regarding future gains in productivity has fed through to an anaemic wages …
27th November 2017
Press reports suggest that the UK will increase its financial offer in a bid to move talks on to phase two at the December EU Council meeting. But the Irish border issue remains unresolved with just over a week remaining before diplomats start drafting …
24th November 2017
Given the persistently disappointing performance of productivity, it is entirely understandable that the Office for Budget Responsibility (OBR) decided in this week’s Budget to adopt more pessimistic assumptions about its future behaviour. What’s more, we …
The rebound in the CBI distributive trades survey was especially reassuring given the larger sample size behind this month’s figures. And the notable strength in the forward-looking balances suggests that retailers expect a decent festive period despite …
23rd November 2017
The second estimate of Q3 GDP confirmed that the economy grew modestly, with households leading the way. Looking ahead, we think that there is scope for a bit of a pick-up in growth, rather than a renewed slowdown as most others expect. … Second estimate …
As expected, the Chancellor Philip Hammond was constrained by the Office for Budget Responsibility’s (OBR) gloom over the economic outlook. Nonetheless, recent favourable fiscal trends and some timely accounting changes allowed him to unveil a bigger …
22nd November 2017
This checklist is intended to help clients keep track of the key measures and numbers announced during the Chancellor’s Autumn Budget at 12.30pm Wednesday 22nd November 2017 and provide some instant context. … UK Autumn Budget 2017 …
21st November 2017
November’s survey painted a somewhat mixed picture for the manufacturing sector. Nonetheless, we expect the sector to still put in a fairly solid performance over Q4 as a whole. … CBI Industrial Trends Survey …
Despite deteriorating in October, the general trend in the public finances this year has still been an improving one. Nonetheless, the expected downward revisions to the OBR’s economic forecasts will probably mean that the Chancellor has no room for …
While the Government is yet to be defeated on the European Union Withdrawal Bill, there was little sign of the negotiations approaching “sufficient progress” this week. Given only two weeks remain for the UK to reach a position the EU is content with, …
17th November 2017
The strength of the labour market has been a key source of comfort since the Brexit vote. But this week’s labour market figures – which revealed a 14,000 fall in employment in the three months to September and the lowest annual rate of employment growth …
With real incomes under pressure from subdued nominal pay growth and rising inflation, it isn’t surprising that spending growth on the high street lost more momentum. Indeed, annual retail sales volumes growth dropped to its lowest since March 2013 in …
The Chancellor’s room for manoeuvre in the Budget on 22nd November will be severely restricted by a gloomier outlook for economic growth. We expect a broadly fiscally neutral package of measures to sustain the prospect of a further substantial fiscal …
16th November 2017
October’s official retail sales figures supported the timelier surveys in suggesting that spending on the high street has lost more momentum. But we doubt that sales growth will slow much further. … Retail Sales …
The 14,000 quarterly fall in employment was the first since October last year. But given the strength of the hiring surveys we suspect this will prove a blip rather than the start of a sustained period of weakness. Meanwhile, there is still little …
15th November 2017
The recent upward trend in CPI inflation came to a halt in October. And while inflation could still inch up a little further in November, it is now likely to be close to its peak. … Consumer Prices & Producer Prices …
14th November 2017
In the latest round of negotiations the EU hardened its stance on the sequencing of talks and the “clarifications” it needs from the UK – particularly on Northern Ireland – for “sufficient progress” on phase one of talks to be reached. And the EU’s Chief …
10th November 2017
As a result of the rise in oil prices in recent weeks, CPI inflation will certainly be a bit higher than we had previously anticipated in the near term. This suggests that it won’t be long before the Governor of the Bank of England gets his letter writing …
