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December’s BRC Retail Sales Monitor was in line with other evidence suggesting that retailers experienced a relatively flat festive season. With consumers’ real incomes still falling, the high street is facing a tough start to the new year. … BRC Retail …
8th January 2013
The renewed pick-up in inflation and the tentative success of the Funding for Lending Scheme (FLS) mean that more quantitative easing (QE) does not look imminent. But if the economic stagnation continues as we expect, more asset purchases still look …
7th January 2013
The new year has got off to a generally positive start on the economic front. However, we wouldn’t get too excited. As we explained in our UK Quarterly Review published last week, we think that the UK economy will continue to flatline this year, with a …
Household borrowing continued to stagnate in November. While there are growing signs that the Bank of England’s Funding for Lending Scheme (FLS) is having a positive impact on borrowing costs, this is not yet translating into higher borrowing volumes. …
4th January 2013
The broad money supply is continuing to expand at a decent pace, but growth has been easing off. Meanwhile, bank lending remains weak although there is some indication of a loosening in credit conditions. … Monetary Indicators Monitor (Dec. …
December’s CIPS/Markit report on services broke the run of good news seen so far this new year and suggested that the economy still looks likely to have contracted in the final quarter of 2012. … CIPS/Markit Report on Services …
Building hopes of global economic recovery, the deterioration in the UK’s inflation outlook and growing fiscal worries have combined to push 10-year gilt yields above 2% today for the first time since May. Nonetheless, there remain good reasons to think …
3rd January 2013
The first news of the new year has been modestly encouraging. Nonetheless, it is hard to see where any meaningful growth will come from this year. We have cut our forecast for GDP growth this year from 0.5% to a meagre 0.2%. … Another year of stagnation …
The Bank of England’s latest Credit Conditions Survey provided further evidence that the positive impact of the Funding for Lending Scheme (FLS) is building. What’s more, the beneficial effects are spreading to the corporate, as well as mortgage, market. …
Over the past five years, the economy has been through three Rs: recession, recovery and relapse. It is hoped that 2013 will see the start of a fourth R, revival. However, we think that the economy will continue to flatline this year, with a meaningful …
2nd January 2013
Christmas trading on the high street appears to have been reasonable, but unspectacular. Following a difficult 2012, we do not have high hopes for retailers in 2013. In fact, consumer spending is likely to stagnate this year, although there will be some …
The further improvement in the CIPS manufacturing survey in December tentatively suggests that output in the industrial sector stabilised at the very end of last year. But 2013 still looks set to be another tough year for UK manufacturers. … CIPS/Markit …
The economy seems to be finishing 2012 on a pretty weak note, quite probably dropping into a “triple-dip” in the final quarter. The big picture is that the economy has been flatlining for over a year and we expect that stagnation to continue in 2013. … …
24th December 2012
GDP is still estimated to have risen strongly in Q3, but we already have plenty of evidence to suggest that the economy may have contracted in the fourth quarter. Indeed, the UK could already be in a “triple-dip”. We think that the economy will struggle …
21st December 2012
December’s sharp drop in consumer confidence suggested that November’s unexpectedly big rise was yet another false dawn. Along with the evidence from Wednesday’s CBI Distributive Trades survey of a sluggish start to spending in December, it looks like …
After a sluggish start to high street spending over the festive period, retailers appear to be losing their nerve and engaging in more widespread price discounting. And prospects for next year are not looking too good. … Retailers losing their …
20th December 2012
The unchanged level of retail sales volumes in November suggested that consumers are keeping their purse strings fairly tightly fastened in the run-up to Christmas. … Retail Sales …
December’s CBI Distributive Trades Survey suggested that activity in the festive shopping period is proceeding at a pretty modest pace. Retailers will be hoping that the last few shopping days before Christmas see a resurgence on the high street. … CBI …
19th December 2012
Contrary to recent suggestions, the sluggishness of the economic recovery cannot be blamed in large part on the energy sector. The economy’s problems run deeper than this. … Economic malaise reflects more than energy sector’s …
December’s MPC minutes had something of an “end of term” feel and simply confirmed that the Committee is in wait and see mode. Perhaps the most notable aspect was further evidence of the MPC’s growing concerns about the high pound. … MPC Minutes …
Continued high inflation is maintaining the squeeze on consumers’ spending power in the run-up to Christmas. Although we still expect inflation to fall back eventually, the prospect of further utility price hikes over the next couple of months suggests …
18th December 2012
Mr Carney’s arrival presents an obvious opportunity to reshape the monetary policy framework and the Governor-to-be last week gave a crucial indication that he, for one, is on board. … Fresh thinking coming to Threadneedle …
17th December 2012
As well as raising hopes about the UK’s future energy independence, the Government’s decision to allow “fracking” in the North West of England to recommence has fostered optimism that the UK economy will be boosted by a new “dash for gas” similar to that …
14th December 2012
The small improvement in the CBI Industrial Trends Survey in December suggested that manufacturing output might have stabilised towards the end of the year. Nonetheless, other indicators have been weaker, while output still seems likely to fall further in …
13th December 2012
The latest labour market figures provided further evidence that the recent strength of employment growth is fading. And real pay is still falling quite sharply. … Labour Market Data (Oct./Nov. …
12th December 2012
Inflation continues to be boosted by external factors over which the Monetary Policy Committee (MPC) can exercise little influence. One way to give the MPC more scope to help the economy could be to move to a target for domestically -generated inflation. …
11th December 2012
The OBR’s downgraded forecasts for economic growth still look too high, suggesting that borrowing will be slower to fall than it expects. And even if the OBR’s forecasts are right, the Chancellor still faces more tough decisions next year when he needs to …
10th December 2012
The further drop in industrial production in October to its lowest level in two decades raises the chances of a triple dip recession in the wider economy. … Industrial Prod. (Oct.) & Inflation Attitudes Survey …
7th December 2012
In order to fund corporate tax cuts and an infrastructure boost, yesterday’s Autumn Statement heaped more pain on consumers. Indeed, by announcing more benefit cuts for 2013 and 2014, and confirming that welfare spending will bear the brunt in the next …
6th December 2012
Although the MPC left its quantitative easing (QE) programme on pause again at today’s meeting, we think that more asset purchases are likely before long. And yesterday’s gloomy Autumn Statement, showing that the austerity drive will now extend to 2018, …
Following last week’s generally disappointing activity surveys, October’s trade data provided another indication that the economy has got off to a weak start to Q4. … Trade …
There were few surprises in this Autumn Statement, which simply represented a continuation of the existing strategy. The Statement will do little to get the economy out of its current malaise and a triple-dip remains a real threat. … Autumn Statement …
5th December 2012
The further deterioration in the CIPS/Markit report on services suggested that the recovery in the biggest part of the economy has completely fizzled out. A renewed contraction in GDP is looking increasingly likely in the final quarter of the year. … …
Following the strong rise in GDP in the third quarter, the more recent news has been disappointing. … Activity relapses in Q4 …
4th December 2012
November’s BRC Retail Sales Monitor supported other evidence suggesting that the start of last month saw strong retail sales growth. But with that growth petering out over the rest of November, underlying growth still looks weak. … BRC Retail Sales …
Although the Monetary Policy Committee (MPC) voted to halt its quantitative easing (QE) programme in November, it has since turned out that policy is just being loosened in another way, namely via the Chancellor’s raid on the QE fund. And the MPC has …
3rd December 2012
The small improvement in the UK CIPS/Markit manufacturing survey in November did little to change the fundamental picture of a struggling industrial sector. Meanwhile, the first data on the usage of the Funding for Lending Scheme showed that banks …
Attention has quickly turned to what impact Mark Carney’s appointment as Governor of the Bank of England is likely to have on monetary policy. We are not convinced by arguments that he has demonstrated either a hawkish or a dovish bias at the Bank of …
November’s surprise pick-up in consumer confidence supported yesterday’s CBI Distributive Trades survey in suggesting that consumers have perked up a bit. But the foundations for a sustained improvement in consumer spirits are lacking. … GfK/NOP …
30th November 2012
November’s CBI Distributive Trades Survey suggests that the festive period has got off to a good start on the high street. But with pay growth likely to remain weak and unemployment set to rise, retailers shouldn’t necessarily put out the bunting yet. … …
29th November 2012
Household borrowing growth remains pretty weak, although there are tentative signs that the Bank of England’s Funding for Lending Scheme (FLS) is starting to have a positive impact. … Household Borrowing Monitor …
The broad money supply is continuing to grow at a decent pace. But there are question marks over whether that will last now that the MPC has paused its quantitative easing (QE) programme and whether firms and households will spend their higher money …
Mortgage approvals are continuing to rise, helped by a further marginal fall in mortgage rates. But they remain far too low to kick-start a sustained recovery in house prices. … Nationwide House Prices (Nov. 12) & Mortgage Lending (Oct. …
The Bank of England continues to argue that inflation is being kept high by a series of one-off factors. Many of the “idiosyncratic” factors boosting inflation at the moment may prove to be more than temporary. Even so, a case could be made for the MPC …
28th November 2012
While real household spending posted a decent rise in the third quarter, at least half of the increase was due to the Olympics. And with the fourth quarter shaping up to be weak, a sustained recovery in spending looks unlikely until next year. … A …
27th November 2012
GDP is still estimated to have risen by a solid 1% in Q3, but this primarily reflected temporary factors. Evidence is building that activity in Q4 has relapsed. … GDP: Second Estimate & Expenditure Breakdown …
Bank of Canada Governor Mark Carney is well-qualified to manage the Bank of England’s expanded role when he takes over from Mervyn King as Governor of the Bank of England at the end of next June. Nonetheless, he faces new and big challenges ahead. … …
26th November 2012
October’s public finance data suggest that the fiscal position remains weak, with the main problem being on the receipts side. Along with rising inflation, downbeat business surveys and recent signs of a softening in the labour market, the latest data on …
A recovery in discretionary spending is in prospect. While tight credit conditions will impede any upturn in outlays on big-ticket items, we think electrical goods, food and clothing should do relatively well. Meanwhile, the fiscal squeeze will hit lower …
23rd November 2012
The Chancellor remains hemmed in by the fiscal position. Indeed, he may well have to choose between introducing even more austerity in the Autumn Statement and letting at least one of his fiscal rules slide. … Autumn Statement 2012 …
22nd November 2012
