Filtered by Subscriptions: UK Economics Use setting UK Economics
The further fall in sterling over the past week or so will add to the inflationary pressures already set to build over the next few years. The drop in the exchange rate will have both direct and indirect effects on consumer prices, as wholesalers and …
14th October 2016
August’s construction figures suggest that the sector is dragging on GDP growth. What’s more, construction’s fortunes are unlikely to improve much in coming quarters as the Brexit vote weighs on the sector. … Construction Output …
The evidence so far has supported our view that the immediate economic impact of the vote to leave the EU would not be as severe as most had expected. And although there are many challenges ahead – not least rising inflation – further support from …
We suspect that the forces which have pushed gilt yields higher in recent weeks have now largely runtheir course. Accordingly, we expect yields to end both this year and next close to current levels. … Will gilt yields carry on …
11th October 2016
While September’s BRC Retail Sales Monitor continued to paint an upbeat picture of consumer spending at the end of Q3, some slowdown ahead looks inevitable. … BRC Retail Sales Monitor …
Markets have been shaken this week by the fallout from the Conservative Party Conference, which revealed that policymakers are set to take the UK down the “hard” Brexit route. By contrast, the economic data has remained relatively upbeat. … Brexit Watch: …
7th October 2016
There are at least three good reasons why the chance of another rate cut this year by the MPC has receded. First, the incoming economic data has been better than expected. Second, there are growing concerns about a more disorderly sterling “crisis” and …
While August’s industrial production and trade data provided a break from therecent run of positive data, the economy still appeared to weather the Brexit votebetter than most expected in Q3. … Industrial Production & Trade …
Both survey and hard data published this month suggest that GDP will grow moderately in Q3, avoiding too sharp of a slowdown from Q2’s upwardly-revised quarterly rate of 0.7%. Indeed, the 0.4% monthly expansion of the services sector in July’s official …
5th October 2016
September’s Markit/CIPS services survey added to other evidence suggesting tha tthe post-referendum economic slowdown has not been too severe. While it perhaps reduces the likelihood of another rate cut in November, other policy support – notably from the …
The first raft of economic data covering the post-referendum period has been fairly robust. But not all sectors have been performing well, with the construction sector still in the doldrums. … Can the construction sector dig itself out of …
3rd October 2016
While the pound’s latest dip has partly reflected concerns over the prospect of a “hard Brexit”, thecurrency’s depreciation should continue to cushion the economic impact of the vote to leave the EU. … Still no need to worry about the …
The Markit/CIPS manufacturing PMI for September showed that both the domesticand export-facing parts of the manufacturing sector are weathering the Brexit vote well. And the sector should contribute to an expansion in GDP in Q3. … Markit/CIPS Report on …
This week provided some further indications that policymakers are leaning towards a harder form of Brexit package than initially anticipated. However, the UK at least appears to be headed into negotiations from a position of relative economic strength. … …
30th September 2016
In contrast to the mostly upbeat data on the state of the economy after the Brexit vote, the housing market still appears to be cooling. But we don’t think house prices or transactions will fall too much further than they already have. … Will the housing …
The latest Quarterly National Accounts showed that consumer spending held up well ahead of the referendum. Looking ahead, although we expect some slowdown, there are a number of factors which should prevent a sharp downturn in spending over the next year …
Today’s Quarterly National Accounts and Balance of Payments figures for Q2 showed that the economy was even more resilient ahead of the EU referendum than previously thought, although it remained unbalanced. … National Accounts & Balance of Payments …
Consumer confidence bounced back to pre-referendum levels in September in another sign that households are shaking off their initial post-Brexit vote blues. … GfK/NOP Consumer Confidence …
The recent surge in the money supply has caused some commentators to suggest that the MPC’s current monetary policy stance is far too loose. But we think that this rapid rise should prove to be temporary and that the MPC won’t be too concerned about it. … …
29th September 2016
The latest data suggest that gold buying from the official sector recovered somewhat in August but overall demand in the year to date remains subdued. That said, we think that the case for gold as a strategic reserve asset remains strong. … Household …
September’s CBI Distributive Trades Survey suggests that the recent strength in retail sales growth won’t last for much longer. But the survey hasn’t been an especially good guide of retail sales, so may well be overstating the extent of any slowdown. … …
27th September 2016
It is almost six months since the introduction of the National Living Wage (NLW) and the initial impact on employment and wages in the retail sector does not appear to be particularly severe. But its impact is still set to grow over time and retailers …
26th September 2016
This week brought another wave of robust economic data and further evidence that sterling’s slideseems to be providing a boost for manufacturers. Meanwhile, there have been further mixed signalscoming from the Government on its Brexit strategy, suggesting …
23rd September 2016
The UK economy may be in a bit of a post-referendum “sweet spot” in which some of the positive developments which we have expected to cushion the impact of the vote – including MPC action and the drop in the pound – have been felt before the major adverse …
While the Bank of England’s Term Funding Scheme (TFS) – which started this week – should prevent a sharp slowdown in bank lending ahead, it is unlikely to provide a meaningful boost. Indeed, while the supply of credit may hold up, weaker demand is likely …
22nd September 2016
According to today’s CBI Industrial Trends Survey, there are few signs that the Brexit vote has knocked manufacturing activity off course in Q3. … CBI Industrial Trends Survey …
The improvement in the public finances in August is unlikely to continue as the post-referendum economic slowdown begins to bite and Chancellor Hammond probably eases the fiscal squeeze in the Autumn Statement. … Public Finances …
21st September 2016
The Prime Minister’s rejection of a points-based migration system (PBS) has left several alternatives which may have more beneficial economic effects. In reality though, the UK’s migration policy decision will be largely determined by the negotiations …
19th September 2016
This week’s informal summit in Bratislava is unlikely to be a turning point in the Brexit saga, but itwill highlight how the UK’s vote to leave the bloc is likely to force faster change within the EU itself. Meanwhile, there has been another wave of …
16th September 2016
The extent of any post-referendum slowdown in consumer spending will hinge crucially on developments in the labour market. While last week’s labour market figures showed little sign of a Brexit impact, conditions may not be quite as rosy as they seem …
Consumer spending growth should slow in the coming few quarters as a result of a number of headwinds. Indeed, we expect the Brexit vote to cause some firms to put a halt on hiring decisions, slowing employment growth. This should result in a rise in …
15th September 2016
While the Monetary Policy Committee’s (MPC) decision to leave interest rates and the scale of its asset purchases unchanged this month came as no surprise after recent upbeat economic data and the relative stability in markets, we still expect another …
Despite August’s small dip in retail sales, the continued strong trend in spending adds to other evidence suggesting that UK consumers have largely shrugged off the vote for Brexit. … Retail Sales …
Given the lags involved, it’s not particularly surprising that the latest data showed that labour market activity has yet to suffer from the apparent post-referendum slowdown in economic growth. … Labour Market …
14th September 2016
August’s stable CPI inflation rate is a temporary pause in an upward trend that should see it rise above the MPC’s target next year. But prospect of above-target inflation probably won’t stop the Committee from easing monetary policy further. … Consumer …
13th September 2016
This week’s data provided further support for our view that the near-term hit to the economy won’t be as severe as many of the pessimistic pre-referendum forecasts. Indeed, while the economy has clearly slowed after the vote, the probability of a …
9th September 2016
The resilience of the recent data has prompted some commentators to question whether the MPC was wrong to cut Bank Rate to 0.25% and announce new gilt purchases of £60bn and corporate bond purchases of £10bn in August. But monetary policy loosening was …
The latest post-referendum official figures indicated that the construction sector held up better than expected in July, and the trade deficit narrowed, continuing the recent trend of relatively upbeat economic data. … Trade & Construction Output …
The rebound in some activity data over the past month has led some to question whether the MPC jumped the gun with its bold package of measures in August. However, the loosening was no doubt one of the factors contributing towards the improvement in …
8th September 2016
Today’s industrial production figures confirmed the previous survey evidence that the leave vote has had an initial adverse impact on the sector in July. But the surveys point to a rebound in manufacturing activity in August. … Industrial Production …
7th September 2016
August’s BRC Retail Sales Monitor points to a large dip in official retail sales growth. But the survey hasn’t been an especially good guide of retail sales recently. … BRC Retail Sales Monitor …
6th September 2016
At first glance, the economy appears to have brushed off the EU referendum. The economy was performing well prior to the vote, with GDP and employment growth both accelerating in Q2. Meanwhile, households appear to be coping well after the referendum, …
5th September 2016
August’s Markit/CIPS services PMI confirmed that the collapse seen in July was a temporary reaction to the shock of the vote to leave the EU. But we doubt this will prevent the MPC from easing monetary policy further in November. … Markit/CIPS Report of …
While this week’s data still clearly point to a slowdown in the economy following the leave vote, they also suggest that conditions improved in August following the immediate post-referendum shock, and that pre-vote forecasts of a deep recession are …
2nd September 2016
While there are already signs of the inflationary impact of the fall in sterling starting to make its way through the supply chain, the drop appears to be providing some support to the economy. Indeed, manufacturing export orders have reached multi-year …
The Markit/CIPS manufacturing PMI for August confirmed out suspicions that the sharp drop in July was an overreaction and adds to other survey evidence suggesting that the economy is getting over the initial Brexit shock. … Markit/CIPS Report on Manuf. …
1st September 2016
Spending on the high street has remained resilient in the few months after the referendum. But one area of spending where Brexit uncertainty may already be taking its toll is car sales. The 72,727 private new cars registered in July was a 6.1% fall on a …
Consumer confidence recovered a little in August in another sign that consumers haven’t been too unsettled by the leave vote. … GfK/NOP Consumer Confidence …
31st August 2016
July’s household borrowing figures highlighted that the housing market continued to cool following the EU referendum and there were signs that consumers’ appetite for debt took a bit of a hit as well. What’s more, with the economic outlook having …
30th August 2016
Data released this week provide further evidence that growth is slowing following the vote to leave the EU. However, they generally don’t point to an outright contraction in activity either, adding weight to our view that the economy will avoid a deep …
26th August 2016
