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Sales solid despite fading online boost Following two consecutive monthly gains, a fall in sales in August was always likely. In the event, sales fell by 0.2% m/m (consensus 0.0%, Capital Economics -0.5%) which dragged annual sales growth to an three …
19th September 2019
Inflation defies rising pay It is possible to put a lot of the fall in inflation in August down to clothing and computer game prices, which are volatile. But there’s no denying that overall inflation is strikingly weak given high wage growth. The fall in …
18th September 2019
Losing some shine July’s figures showed that the labour market has remained remarkably resilient despite the underlying weakness of economic growth, but some small cracks are starting to appear. The most striking aspect of the latest figures was the rise …
10th September 2019
Political chaos, yes. Economic chaos, no. While Parliament seems to be falling apart, the economy is holding up reasonably well. July’s surprisingly strong rise in GDP suggests that it has not fallen into a recession. Even if the +0.3% m/m and 0.0% 3m/3m …
9th September 2019
Services PMI showing cracks but unlikely to break The small drop back in the services PMI in August could indicate that the weakness in some parts of the economy is starting to feed through into the services sector. However, the services PMI is still at a …
4th September 2019
Manufacturing is slipping into recession The fall in the manufacturing PMI in August to its lowest level since July 2012 suggests the industrial sector has continued to contract. But we doubt that manufacturing will pull the overall economy into …
2nd September 2019
Sentiment amongst businesses and consumers weakens August’s EC survey of UK business and consumer confidence raises concern that the consumer sector may soon succumb to the malaise that has taken hold in the manufacturing sector. But with real wage growth …
29th August 2019
Surplus not enough to put government finances back on track The small surplus in July’s public finances wasn’t enough to make up for the jump in borrowing since the start of the financial year and suggests that borrowing will overshoot the OBR’s forecast …
21st August 2019
Reasonable start to Q3 The rise in retail sales in July was fairly encouraging and supports our view that the economy has picked up in Q3 after contracting by 0.2% q/q in Q2. Indeed, July’s 0.2% m/m rise in retail sales volumes beat the consensus forecast …
15th August 2019
Back above the 2% target July’s inflation figures may dampen speculation that the Bank of England will follow in the Fed’s footsteps and cut interest rates. With stronger pay growth and the fall in the pound likely to ensure that inflation is above target …
14th August 2019
Labour market shrugs off economic contraction The labour market has shrugged off the 0.2% q/q fall in GDP in Q2, providing support to our view that the economy will recover in Q3. Indeed, employment rose by 115,000 on the quarter (consensus +60,000), the …
13th August 2019
Contraction in Q2, but recession unlikely The small contraction in GDP in Q2 throws up the spectre of a recession even before Brexit. However, almost all the weakness was because the original Brexit deadline meant that activity that would have happened in …
9th August 2019
Services sector proves resilient The low level of the PMI surveys, particularly for construction and manufacturing, is consistent with the economy struggling in the aftermath of the original Brexit date. But there was some encouraging signs of …
5th August 2019
Signs of stabilisation, but no rebound in the works The manufacturing PMI remained at 48.0 in July, which was slightly stronger than expected (consensus 47.7), but it still indicates that manufacturing output fell at the start of Q3. However, the ongoing …
1st August 2019
Confidence strengthens, but unlikely to rise further over next few months Consumer confidence recovered a little in July, but rising concerns about a no deal Brexit could mean that sentiment soon returns to its recent lows. The composite GfK/NOP measure …
31st July 2019
Heading off track June’s public finances figures continued the underlying deterioration in the fiscal position evident since the beginning of the financial year and provided a timely reminder that the next Prime Minister won’t get a free “fiscal lunch” in …
19th July 2019
Signs of life after a soft patch The rebound in retail sales in June was a big relief as it shows that there is some life in household spending yet and suggests that the overall economy may have avoided a contraction in Q2. The 1.0% m/m rise in retail …
18th July 2019
Few signs of a rise in inflationary pressure There is little pressure for the MPC to adjust interest rates in either direction with CPI inflation remaining at the Bank of England’s 2% target for a second consecutive month in June. The continued absence of …
17th July 2019
Weaker employment growth probably here to stay The further slowdown in employment growth in May looks set to continue over the rest of this year as firms take a breath after the hiring spree in the first quarter. However, the labour market should still …
16th July 2019
Possible contraction in Q2, but recession unlikely Despite the rebound in monthly GDP in May, the economy may have contracted in Q2 as a whole. But it’s going to be close and we doubt we’re heading for a recession as GDP will probably rise in Q3 anyway. …
10th July 2019
Relatively resilient services sector won’t prevent contraction Following the falls in the manufacturing and construction surveys, the smaller decline in the headline business activity balance of the services PMI, from 51.0 in May to 50.2 in June, was a …
3rd July 2019
Brexit comedown and weak global economy weigh on manufacturing The drop in the manufacturing PMI from 49.4 in May to 48.0 in June (consensus 49.2) takes it to its lowest level since February 2013 and indicates that the sector is still suffering from a …
1st July 2019
Boost from preparing for Brexit will reverse GDP growth was unrevised at 0.5% q/q in the first quarter of the year, but that probably marked a temporary high as activity was brought forward ahead of the original Brexit deadline. Consequently the economy …
28th June 2019
Confidence weakens, but consumer spending should hold up Given the mounting concerns over a no deal Brexit, it is perhaps unsurprising that the GfK/NOP measure of consumer confidence dropped back in June. But with real wage growth strong and inflation …