Filtered by Subscriptions: UK Economics Use setting UK Economics
It may not be long before one or two Monetary Policy Committee members vote for a rise in Bank Rate. But with signs that the economic data have taken a bit of a softer turn since February’s Inflation Report, this month’s decision to keep rates on hold and …
9th March 2017
The Office for Budget Responsibility’s caution on both the economic and fiscal outlook limited the Chancellor’s room for manoeuvre in this last spring Budget. But he still has a little room to loosen the purse strings later this year or beyond if the …
8th March 2017
This checklist is intended to help clients keep track of the key measures and numbers announced during the Chancellor’s Budget at 12.30pm tomorrow and to provide some instant context. … UK Budget …
7th March 2017
The latest fall in the pound has reflected stronger growth overseas and falling expectations for UK inflation rather increased fears of Brexit damage. Indeed, it could help to cushion the blow of the vote to leave the EU by giving the external sector …
February’s BRC Retail Sales Monitor added to other evidence that the hit to real consumer spending growth from higher inflation is now starting to materialise. … BRC Retail Sales Monitor …
Renewed calls for a second referendum on Scottish independence, and the House of Lords’ amendments to the Article 50 Bill are stumbling blocks to Theresa May’s Brexit plans, but we doubt that either significantly reduce the chance of the notification …
3rd March 2017
Resilient consumer spending was the main reason why GDP growth held up so well in the wake of the Brexit vote. However, there have been signs that the exchange-rate induced rise in inflation is starting to hit real spending growth. Indeed, the expansion …
Companies’ margins are starting to bear the brunt of the exchange-rate induced rise in costs. And given the deterioration in consumer confidence, slower employment growth and the strong competitive environment, we suspect that retailers may not be in a …
February’s Markit/CIPS services survey adds to other evidence that suggests that the economy has lost a bit of momentum in the first quarter. And there are a number of headwinds that are likely to continue to weigh on growth this year. … Markit/CIPS …
The more rapid improvement in the public finances than anticipated in the Autumn Statement, should give the Chancellor a borrowing windfall. However, the recent strength in the economy means that there is little need to provide a near-term stimulus and we …
1st March 2017
January’s UK money and credit figures showed that mortgage approvals have continued on their upward trend, after the lull around last year’s EU referendum, and that consumers may be becoming a little more cautious about borrowing. The number of mortgages …
Despite the fall in February’s Markit/CIPS manufacturing PMI, the survey still suggests that the sector carried a decent amount of momentum into 2017. However, there are signs that price rises are starting to hurt domestic demand. … Markit/CIPS Report on …
Rising inflation appears to be starting to weigh on consumer sentiment. That said, confidence remains above its long-run average, suggesting that the expected slowdown in consumer spending growth won’t be too severe. … GfK/NOP Consumer Confidence …
28th February 2017
Once Article 50 has been triggered, one of the first things that will be discussed is the UK’s “divorce settlement” – or the degree to which the UK will cover its share of pending EU commitments and liabilities. The EU Chief Negotiator’s likely opening …
27th February 2017
There have been growing signs that some EU nationals are reacting to the vote to leave the EU by either returning to their country of citizenship or by obtaining residency rights in the UK. Meanwhile, the positive and negative effects of the Brexit vote …
24th February 2017
On the face of it, last week’s GDP figures were encouraging. After all, they indicated that the economy accelerated at the end of last year, and suggested that the post-referendum drop in the pound is starting to drive a strong performance in net exports. …
February’s CBI Distributive Trades Survey made for disappointing reading. On top of the poor official retail sales figures for the start of the year, this adds to the evidence that the hit to consumer spending growth from higher inflation is starting to …
23rd February 2017
The second estimate of Q4 GDP was a bit a mixed bag, but confirmed that the UK economy gathered momentum over the course of 2016. While the outlook remains uncertain, we think that the economy will hold up better than most expect. … GDP: Second Estimate & …
22nd February 2017
Weak public borrowing compared to the consensus forecast in January was due to a change in the way the ONS measures corporation tax receipts. Revisions to previous months actually means that borrowing is set to be well below the OBR’s forecasts. … Public …
21st February 2017
February’s CBI Industrial Trends Survey added to the evidence that the manufacturing sector is getting back onto its feet. This should help prevent GDP growth from losing too much momentum in the quarters ahead. … CBI Industrial Trends Survey …
20th February 2017
While the possibility of Parliamentary “ping-pong” suggests that a triggering of Article 50 at the EU summit on 9th & 10th March is unlikely, the Prime Minister’s self-imposed deadline of the end of March should still be met. … Brexit Watch: Parliamentary …
17th February 2017
There are growing signs that the post-referendum strength in consumer spending is beginning to fade. With CPI inflation set to pick up to around 3% by the end of this year, growth in households’ real wages is likely to slow considerably which could …
Last week’s labour market and inflation figures have fueled concerns that the impact of rising inflation on real earnings will cause a significant slowdown in consumer spending growth. Indeed, rising inflation and a fall in annual average earnings growth …
January’s surprise fall in the official measure of retail sales volumes has brought the recent run of resilient economic news to an abrupt end and suggests that the hit to consumer spending growth from higher inflation is starting to materialise. … Retail …
The latest data suggest that while the labour market has lost some momentum recently, it has held up fairly well in the face of Brexit uncertainty. However, real wage growth has started to become squeezed. … Labour Market …
15th February 2017
Growth in household spending is likely to slow over the next few years as inflation rises and dampens growth in real incomes. But loose credit conditions and relatively upbeat sentiment by past standards should ensure that spending does not slow too …
14th February 2017
CPI inflation took another step up in January and looks set to breach the MPC’s 2% target next month. However, we don’t think that the forthcoming rise will panic the MPC into hiking interest rates much earlier than markets expect. … Consumer Prices & …
The response from policy makers is one of the main reasons that the UK economy has so far weathered the Brexit vote well. And there are reasons to think that monetary and fiscal policy can continue to support the economy as Brexit negotiations …
13th February 2017
The Government got another step closer to being able to trigger Article 50 before its self-imposed deadline of 31st March. Meanwhile, the latest data suggest that the post referendum drop in the pound may be helping to rebalance the economy towards …
10th February 2017
A robust rise in manufacturing activity at the end of 2016 and in the output balance of the Markit/CIPS manufacturing survey have raised hopes that the sector is getting back onto its feet. Admittedly, the sector faces a number of headwinds, not least …
Today’s economic activity data added to other evidence suggesting that the economy maintained a significant amount of momentum at the end of 2016 and implies that GDP growth is becoming more balanced. … Industrial Production, Construction & Trade …
The prospect of Brexit has proved much less damaging to the UK economy than most forecasters expected after the referendum seven months ago. And while there is still much uncertainty over what Brexit will actually look like, there are reasons to think …
7th February 2017
January’s BRC Retail Sales Monitor echoed other evidence that there has been some moderation in consumer spending growth. And with higher inflation set to slow the pace of real income gains, spending growth is likely to ease further over 2017. … BRC …
Following a strong end to 2016, the economy appears to have carried a decent amount of momentum over into 2017. Despite a slight fall in the Markit/CIPS all-sector PMI in January, it is still at a level consistent with quarterly GDP growth of around 0.5%. …
6th February 2017
A key reason why the UK economy has proved unexpectedly resilient since the vote for Brexit is that the resulting uncertainty has not had the negative effects that many had anticipated. And there are reasons to think that the dog will remain quiet. … …
The Government moved one step closer to triggering Article 50 this week after MPs overwhelmingly voted in favour of its bill. Meanwhile, the latest economic data suggest that the economy has maintained a decent amount of momentum around the turn of the …
3rd February 2017
Last week’s Inflation Report saw the Monetary Policy Committee (MPC) seemingly abandon “Project Fear” in favour of “Project Optimism”. Indeed, the MPC seemed upbeat on growth prospects and relaxed about above-target inflation. But not all members of the …
January’s Markit/CIPS report on services suggests that the economy lost a little bit of momentum at the start of 2017, following the strong end to 2016. However, the PMI surveys added to signs that GDP growth might be more balanced in 2017. … Markit/CIPS …
The first Bank of England “Super Thursday” of 2017 saw the MPC Minutes and Inflation Report strike a cautiously-optimistic tone. That said, while the economy appears to be coping with Brexit uncertainty well so far, we think the start of the monetary …
2nd February 2017
Sterling’s post-referendum fall has clearly put inflation on a steep upward trajectory this year. But there are reasons to think that the forthcoming rise in CPI inflation won’t be too great and that it will not herald the start of a prolonged bout of …
1st February 2017
Although price pressures are building rapidly, January’s Markit/CIPS manufacturing survey suggests the sector started the year on a stronger footing. … Markit/CIPS Report on Manuf. …
While there are still considerable uncertainties over the economic outlook, we maintain our view that the damage from the UK’s vote to leave the EU will be smaller than most forecasters have anticipated. Admittedly, higher inflation and Brexit uncertainty …
31st January 2017
December’s household borrowing figures showed that demand has continued to return to the housing market, following a lull around the referendum, but that consumer credit growth slowed for the first time in six months. Admittedly, the rise in new mortgage …
Despite concerns about the economic outlook, consumer confidence strengthened in January and the details of the survey provide another reason to think that the likely slowdown in spending growth this year won’t be too severe. … GfK/NOP Consumer Confidence …
While the Supreme Court decision won’t prevent Brexit from happening, it has perhaps increased the chance that Theresa May’s timeline for triggering Article 50 will slip and/or that there could be more Parliamentary scrutiny. Meanwhile, the announcement …
27th January 2017
The solid 0.6% expansion in UK GDP in the fourth quarter of last year provided further evidence that the vote to leave the European Union has so far had little discernible adverse effect on the UK economy, in stark contrast to the Treasury’s …
The Monetary Policy Committee (MPC) faces a less challenging trade-off between supporting the economy and controlling inflation. It will probably upgrade the growth projections in its Inflation Report. But the recent rebound in sterling should result in a …
26th January 2017
Following December’s disappointing official retail sales result, January’s CBI Distributive Trades Survey suggests that the sector started the year on a poor footing. However, while we think that consumer spending growth is set to ease in 2017, it …
The strong end to last year provides plenty of momentum heading into 2017. And while growth looks set to ease this year, the beneficial effects of the fall in the pound should help to ensure that the slowdown won’t be too severe. … Preliminary estimate of …
January’s CBI Industrial Trends Survey showed that the manufacturing sector has carried a decent amount of momentum into the New Year. … CBI Industrial Trends Survey …
25th January 2017
