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The latest regional figures suggest that the pace of economic recovery has increasingly diverged between the regions, with growth strengthening in most areas of the Midlands and the South, but weakening further in the North. … Regional Monitor …
19th April 2012
It may still be many years before the UK’s huge reserves of shale gas can be profitably exploited on a large scale, but the impact could then be significant. Even in the near term, the boom in the supply of shale gas in the US is another reason to expect …
18th April 2012
April’s fairly hawkish MPC minutes left it looking more likely that the Committee will pause its quantitative easing (QE) programme once the purchases currently underway are completed next month. But we still expect more QE later this year. … MPC …
The recent downward trend in inflation came to a halt in March, but this should be only temporary. We still expect inflation to fall below its target later this year. … Consumer Prices …
17th April 2012
The UK has now experienced about four years of below-average productivity growth. We remain sceptical that this means that productivity growth has been permanently damaged. So we still think that a significant rebound is likely at some point. But in the …
16th April 2012
With last week’s dribble of economic figures hardly setting the pulse racing, it was the pound’s appreciation to its highest level since August 2010 that made the headlines. … Sterling’s rise clouds export …
March’s producer prices figures confirmed that rising energy prices have pushed up manufacturers’ costs. Nonetheless, the figures still suggested that consumer price inflation is on course to fall to a low rate by the middle of next year. … Producer …
13th April 2012
The latest disappointing trade figures suggested that net trade’s positive contribution to GDP growth in the final quarter of last year is likely to have been a one-off. … Trade …
12th April 2012
Any lingering hopes that the European Central Bank (ECB) had either already solved the euro-zone crises or would yet come riding to the rescue with much more decisive action were surely put to bed by last week’s post-interest rate announcement press …
9th April 2012
Today’s decision by the Monetary Policy Committee (MPC) to stay the course and complete the previously authorised asset purchases was always likely, given the pattern of past QE decisions. While the pick-up in the activity surveys and rise in oil prices …
5th April 2012
February’s industrial production figures put something of dent in hopes that a recovery in manufacturing would help to rebalance the economy and help overall GDP to post a decent expansion in the first quarter. … Industrial Production …
The UK economy appears to have avoided a slide back into recession, if the activity surveys for the first quarter are to be believed. Indeed, the economic recovery appears to have gathered a bit of momentum in March. Nonetheless, the persistence of high …
4th April 2012
The improvement in March’s CIPS report on services added to the evidence that the overall economy expanded in Q1 and has therefore avoided a technical recession. But we would not conclude that the economic recovery is back on track yet. … CIPS/Markit …
The sharp rise in the Halifax house price index in March simply reverses the dip seen since last July. Therefore, it does little to alter the picture of a housing market that remains very weak. … Halifax House Prices …
The Monetary Policy Committee (MPC) appears increasingly divided between those members who want to provide the economy with more stimulus and those who think that they have now done enough. For now, the doves seem to be in the minority. And the extra …
2nd April 2012
The improvement in March’s CIPS report on manufacturing suggested that the industrial recovery still has some momentum. But there were also signs that manufacturing output may struggle to grow in the coming months. … CIPS/Markit Report on Manufacturing …
The breakdown of Q4 GDP showed that the greatest support to the economy at the end of last year came from consumer spending. However, the good news on the consumer sector last week was largely outweighed by the bad. … Can consumers continue to support …
The continued weakness of the broad money and lending figures supports our view that the Monetary Policy Committee will yet have to provide the economy with even more stimulus. … Monetary Indicators Monitor …
29th March 2012
The overall message from today’s data was that weak bank lending is likely to remain a significant constraint on the economic recovery. … Approvals, M4, Credit Conditions & …
The Nationwide house price index recorded its largest drop in two years in March, suggesting that our forecast of a 5% drop during 2012 remains on track. … Nationwide House Prices …
There are a number of reasons to remain optimistic about the outlook for the UK’s external sector. Admittedly, these are likely to be outweighed in the near-term by the knock on effects of the euro-zone recession. But once another tough year or two have …
28th March 2012
Recent claims that, despite the fiscal squeeze, government spending is still rising in real terms have revived the debate about whether the spending plans are actually as tough as they look. But while this is true on one definition of government spending, …
The downward revision to GDP in Q4 is not too worrying given that the economic news has improved since then. However, we doubt that the recent pick-up in the recovery will last. … National Accounts & Balance of Payments …
The furore over the so-called “granny tax” denominated the media’s post-mortem of the Budget, but the big picture is simply that little changed on Wednesday. … Enormous fiscal squeeze still lies …
26th March 2012
The consumer recovery appears to have picked up pace around the turn of the year, although the softening in the latest measures of high street spending suggest that the recovery is still on fragile ground. … Consumer recovery underway, but looking …
22nd March 2012
February’s retail sales figures suggested that the recent recovery on the high street is already running out of steam. … Retail Sales …
This was a neutral, steady-as-she-goes budget, with few implications for the macro-economy. From his speech, the Chancellor came across as wanting to be radical, but the measures failed to live up to the rhetoric. … Budget 2012: Not rocking the …
21st March 2012
February’s public finance figures got Budget Day off to a bad start for the Chancellor, while the minutes of March’s MPC meeting showed that the door to more quantitative easing is still ajar. … Public finances (Feb.) & MPC minutes …
The recent rise in oil prices did not stop inflation from taking another step down in February. Admittedly, progress has slowed a bit and inflation could even rise in March. But we still expect it to fall below its target by the end of the year. … …
20th March 2012
The recent rise in gilt yields has mainly reflected a pick-up in interest rate expectations and the growing belief that the MPC will soon be done with QE, rather than growing concerns about the health of the public finances ahead of this week’s Budget. … …
19th March 2012
Today’s Bank of England figures showed that UK banks further reduced their exposures to European countries in the final quarter of last year. Nonetheless, the euro-zone debt crisis continues to pose a serious threat to the UK financial system. … UK …
16th March 2012
Droughts across the UK and some of Western Europe are threatening to push up food prices. Along with the recent rise in energy prices, this might prevent CPI inflation from falling as sharply as hoped this year. But as things stand, it should not stop …
15th March 2012
The latest regional figures suggest that the economic recovery remains weakest of all in Northern Ireland, but has continued to gather momentum the most in the West Midlands. Meanwhile, although the employment outlook appears to be brightening in London, …
14th March 2012
Reports that the Chancellor is considering issuing bonds of 100 years or more in order to take advantage of the government’s low borrowing costs underline the UK’s perceived safe-haven status relative to most other highly indebted countries. … 100 year …
Today’s labour market figures painted a pretty weak picture, with unemployment rising further and pay growth weakening sharply. … Labour Market Data …
Although the UK trade deficit widened in January, the big picture is that the external sector is still holding up quite well given the euro-zone debt crisis. But with the euro-zone economy sliding into recession, we doubt that this will last. … Trade …
13th March 2012
The Chancellor’s resolve to stick to his austerity plans appears to be as strong as ever. We expect another fiscally neutral Budget, with flagship measures such as another rise in the personal tax allowance paid for by a further squeeze on the rich. … …
12th March 2012
Last week marked the third anniversary of official interest rates at just 0.5%. And while there are bound to be both winners and losers, it seems as if no-one is happy about it! … Savers’ plight won’t move the …
Today’s disappointing industrial figures provided further evidence to suggest that the manufacturing recovery may already be starting to lose steam. … UK Ind. Production (Jan.) & Producer Prices …
9th March 2012
Reports that the Chancellor is considering issuing bonds of 100 years or more in order to take advantage of the government’s low borrowing costs underline the UK’s perceived safe-haven status relative to most other highly indebted countries. … Consensus …
8th March 2012
Tomorrow’s MPC meeting marks the third anniversary of interest rates reaching a record low of just 0.5% in March 2009. We think that they could stay at this level for another three years. … 0.5% rates - 3 years down, another 3 to …
7th March 2012
The recent rise in oil prices has sparked fears that CPI inflation will not fall as fast as hoped. However, the focus on oil prices ignores the fact that other commodity prices have risen by less, if at all. … Focus on oil prices neglects wider …
6th March 2012
On its own, the latest dip in house prices is nothing to be too concerned about. But with mortgage interest rates edging up again and unemployment still rising, the downward trend in prices is likely to become entrenched this year. … Halifax House …
Having only just extended its quantitative easing programme by £50bn at last month’s meeting, the MPC is very unlikely to do anything at this week’s meeting. What’s more, comments by Committee members over the last month suggest that they are cooling on …
5th March 2012
February’s CIPS/Markit report on services echoed the manufacturing survey released last week in suggesting that the recent pick-up in economic activity has already started to fade. … CIPS/Markit Report on Services …
Mervyn King faced tough questioning by the Treasury Committee last week on a couple of issues - and fought back hard. The Governor strongly resisted suggestions that the Bank of England should follow the ECB in conducting its own long-term refinancing …
The rise in energy prices adds to the reasons to be cautious about assuming that the recent pick-up in the economic recovery will continue. … Rise in oil prices presents new threat to …
1st March 2012
February’s CIPS report on manufacturing tentatively suggested that the industrial recovery might be starting to falter. Nonetheless, the industrial sector will probably still support overall GDP growth in the first quarter. … CIPS/Markit Report on …
Following falls in December and January, the modest rise in the Nationwide house price index in February is symptomatic of a market that is still struggling for direction. Given that prices are still at historically high levels relative to incomes, a …
The broad money supply bounced back in January, suggesting that the extreme weakness at the end of last year was just temporary. But the underlying trend still looks too weak to support a sustained economic recovery. … Monetary Indicators Monitor …
29th February 2012
