Filtered by Subscriptions: UK Economics Use setting UK Economics
May’s CBI Distributive Trades Survey indicates that Brexit concerns are still weighing on the retail sector. But the survey has been more pessimistic than the official data recently, so the latest reading may be overstating the extent of any slowdown. …
24th May 2016
The disappointing tone of the latest public borrowing figures ended the recent short run of more upbeat economic data and indicated that the Chancellor has started the fiscal year on the back foot. … Public Finances …
We think the Treasury (HMT) report, published today, suggesting that the UK will go into recession if it leaves the EU goes a bit far. Existing trading relationships will remain in place over the two year negotiating period and a fall in sterling, as …
23rd May 2016
This week saw the campaign to remain in the EU surge ahead in opinion polls, helping to ease investors’ Brexit worries. Meanwhile, strong retail sales data suggest that consumers haven’t been as badly affected by referendum uncertainty as previously …
20th May 2016
Last week broke the recent run of disappointing news and went some way to calming fears that the economy is slowing abruptly. Perhaps most reassuring was the pick-up in retail sales growth, given that the economy has recently been reliant on consumer …
The CBI Industrial Trends Survey for May showed an improvement in manufacturing activity over the past month despite a tough external environment and EU referendum uncertainty. … CBI Industrial Trends Survey …
The consumer recovery appears to have got back on track, at least as far as the official retail sales figures indicate. Indeed, consumer confidence still seems to be holding up well despite the looming EU referendum. And even though nominal earnings …
19th May 2016
April’s official UK retail sales figures painted a more upbeat picture than the recent survey and anecdotal evidence and suggested that high street spending has now come through its recent soft patch. Indeed, consumers appear to be shrugging off any …
Although there were some bright spots in today’s labour market figures , on the whole they offered a further indication that the economic slowdown has sapped the jobs recovery of its recent vigour. … Labour Market Data …
18th May 2016
April’s fall in CPI inflation merely reflects erratic Easter effects unwinding and is unlikely to be the start of a renewed downward trend. But the big picture is that price pressures in the economy are still weak. … Consumer Prices & Producer Prices …
17th May 2016
The MPC’s attempt to base its forecasts on the UK remaining in the EU suggests that it believes trade-weighted sterling will rise by around 5% on a vote to stay. But it also implies that it doesn’t think that interest rate expectations will be affected. …
13th May 2016
This week’s dismal trade, industrial production and construction data has further intensified concerns that Brexit uncertainty is having an effect on activity. Nonetheless, they also highlight that not all of the recent slowdown can be blamed on …
March’s construction figures confirmed the sector’s recovery has gone into reverse, leaving GDP growth precariously unbalanced. What’s more, recent evidence points to continuing weakness in the near term. … Construction Output …
In its latest Inflation Report, the MPC sounded a stark warning about the potential adverse effects on the economy of a Brexit, but nonetheless continued to indicate that, if the UK votes to stay in the EU, markets’ interest rate expectations are too low. …
12th May 2016
This morning’s ONS release, showing there has been a large recent rise in short-term EU immigration, will probably lead to exaggerated claims about the UK needing to regain control of its borders. While we think claims that EU immigration has been …
Brexit concerns have not been the only driver of the recent slowdown, suggesting that we should not expect a particularly big rebound in activity if the UK votes to stay in the EU in June. At the same time, though, we doubt that a serious reduction in …
11th May 2016
Disappointing official industrial figures in March confirmed that the sector has slipped back into recession, leaving GDP growth precariously unbalanced. … Industrial Production …
Following two months of weak official retail sales figures, April’s BRC sales data dented hopes that the weakness would prove temporary. Nonetheless, we still think that talk of a marked collapse in consumer spending is wide of the mark. … BRC Retail …
10th May 2016
Despite the improvement in today’s trade figures for March, net trade still appears to still be dragging on GDP growth. And trade is set to make a larger negative contribution to the current account balance in Q1 than in Q4. … Trade …
The gloomy tone of this week’s PMI data provided further concrete evidence that the uncertainty generated ahead of the EU referendum is weighing on activity. As with last week’s GDP data, other factors were probably at play too. But overall , it’s clear …
6th May 2016
The economy seems to be on a worrying downward trajectory. But if activity were about to fall off a cliff, we might expect forward-looking measures of confidence and expectations to be tumbling and this does not seem to be the case. Although there was …
Recent data have brought more concrete signs that uncertainty ahead of the EU referendum on 23rd June is starting to weigh on the economy . GDP in Q1 grew by a modest 0.4% on the quarter and the Markit/CIPS surveys point to a further slowdown in Q2. …
5th May 2016
A policy change looks very unlikely this month. Not only will the MPC not want to rock the boat ahead of the EU referendum, but the economy still does not look strong enough to warrant a tightening of policy. But if the UK votes to stay in the EU, we …
The fall in the Markit/CIPS services survey in April suggests that economic growth will soften further in the near term, perhaps until uncertainty surrounding the EU referendum is resolved. … Markit/CIPS Report on Services …
Consumers face a tougher year than last, with Brexit uncertainty mounting, austerity increasing and inflation rising. Nonetheless, strong levels of confidence and a resilient labour market should prevent consumer spending growth from slowing too …
4th May 2016
We doubt that the MPC will model separate ‘remain’ and ‘leave’ scenarios in its Inflation Report next week. But Brexit uncertainty will still affect its forecasts via its assumptions about the exchange rate and interest rates. As this uncertainty will …
The latest Markit/CIPS manufacturing survey suggested that the sector began Q2 on a poor footing and will increase fears that the economic recovery will slow further inQ2 as the EU referendum nears. Nonetheless, we remain optimistic that manufacturers’ …
3rd May 2016
GDP data released this week suggests that Brexit uncertainty probably weighed on growth in Q1. But other factors were at play too. And recent surveys generally indicate that the impact of Brexit uncertainty on economic activity, while negative, may …
29th April 2016
The retail sector’s productivity performance has been better than it has often been given credit for. That said, with the sector particularly hard-hit by the new National Living Wage, boosting productivity even further will be essential in order for …
Softening activity indicators and the moderation in quarterly GDP growth from 0.6% in Q4 to 0.4% in Q1 have fuelled a number of warnings, notably from Chancellor George Osborne and the OECD, that the threat of leaving the EU has been weighing on …
March’s household borrowing figures will only have added to concerns that the consumer recovery is built on unsustainably-high rates of unsecured lending growth. But there are reasons to think that consumer credit growth is not yet a major threat to …
While consumer confidence fell more sharply than expected in April, we would caution against reading too much into one month’s data. What’s more, April’s reading was still within the top 30% of all readings since the survey was first conducted in 1974, …
Sterling’s recent rally as expectations of a Brexit have fallen suggests that the pound will rise further if the UK votes to remain in the EU. But there are reasons why the rally is unlikely to last. … Is sterling’s recent rally here to …
28th April 2016
As had been expected, today’s GDP figures confirmed that the economic recovery cooled in Q1. But we wouldn’t wholly blame the slowdown on uncertainty ahead of the EU referendum given jitters in financial markets and concerns about the global recovery at …
27th April 2016
Following the poor official retail sales figures in March, April’s CBI Distributive Trades Survey proved very disappointing reading. But while Brexit and other uncertainties may currently be weighing on spending a little, we remain upbeat about the …
The CBI Industrial Trends Survey for April & Q2 showed a slight improvement in manufacturing activity over the past month and firms are still optimistic about the future, despite the risks surrounding the impending EU referendum. … CBI Industrial Trends …
25th April 2016
With only two months left until the referendum, we will be publishing a weekly Brexit Watch to help clients keep track of all the latest developments. Evidence that the economy is beginning to suffer has grown over the past week, although it is hard to …
22nd April 2016
The fall in the household saving ratio to a record low in 2015 might suggest that recent robust consumer spending growth is unsustainable and that the saving ratio will need to rise again. But the fall in household saving has been overstated by …
It is possible that an out vote in the EU referendum could push up mortgage interest rates. But if it did, we suspect any rise would be modest and that the drivers of that rise would not be those outlined by the Chancellor. … Gilt yields to rise …
At the heart of most of last week’s wealth of Brexit -related publications and comments was the issue of what will happen to trade if the UK votes to leave. As with pretty much all aspects of the Brexit debate, it is wise to take both sides’ claims …
Although retail spending has come off the boil in the past couple of months, the consumer recovery is on the whole holding up reasonably well. Indeed, there are few signs that Brexit uncertainty is having much of an effect, with consumer confidence still …
21st April 2016
March’s fall in retail sales added to other evidence indicating that the economic recovery has slowed since the start of the year. While there was better news on public borrowing, the OBR’s full-year forecast has been missed. … Public Finances & Retail …
Today’s UK labour market data added to recent signs that the economy slowed at the start of 2016. Accordingly, interest rates look set to be on hold for a while yet. … Labour Market Data …
20th April 2016
The report by HM Treasury, published today, on the long-run economic impact of a Brexit, paints a fairly gloomy picture. However, this is just another in what is an extensive and wide-ranging set of estimates, and rests on some pretty pessimistic …
18th April 2016
It is generally accepted that the main channel through which uncertainty ahead of the EU referendum will hit the economy is the negative impact on business investment. But on the whole, last week’s Bank of England Credit Conditions Survey gave some …
15th April 2016
The MPC’s unanimous decision to leave Bank Rate on hold at 0.5% today was unsurprising given recent signs of a slowdown in economic activity and heightened uncertainty surrounding the EU referendum. These factors will contribute to the MPC leaving rates …
14th April 2016
March’s consumer prices release showed the economy’s movement away from deflation resumed after stalling in February. … Consumer Prices & Producer Prices …
12th April 2016
March’s BRC sales figures showed surprisingly weak retail sales growth. While we don’t think this points to a sharp slowdown in consumer spending, it does support the view that this year may not be quite as strong as the last for consumers. … BRC Retail …
Although the EU referendum is less than three months away, its impact on the economy has so far been relatively modest. And if the UK votes to stay, activity could subsequently rebound. Admittedly, GDP growth is still unlikely to better last year’s 2.3% …
11th April 2016
