UK Markets Chart Pack Markets expect earlier rate hikes to quash inflation The combination of the Fed’s more hawkish tone and the larger-than-expected rise in UK CPI inflation in May to 2.1% has led the financial markets to bring forward their expectations of when the Bank... 23rd June 2021 · 8 mins read
UK Economics Public Finances (May) May’s public finances figures suggest the strong economic recovery is starting to feed through into lower government borrowing. This reinforces our view that the tax hikes and spending cuts that most... 22nd June 2021 · 3 mins read
UK Economics Pay growth less inflationary than it looks, England v Scotland The recent jump in pay growth has mainly been driven by base and compositional effects and is therefore less inflationary than it appears at first glance. That’s one reason why we think inflation will... 18th June 2021 · 6 mins read
UK Economics Labour Market (Apr./May) Another strong set of labour market figures released this morning will feed concerns about labour shortages and the possible impact on inflation of higher wage growth. But the level of employment is... 15th June 2021 · 2 mins read
UK Economics GDP & International Trade (Apr.) The jump in GDP in April was another sign that consumers are raring to spend as the economy reopens. And all the early indicators suggest that GDP growth was strong in May as well. As such, our... 11th June 2021 · 4 mins read
UK Economics Chart Pack Inflation risks rising The risks to our forecast that CPI inflation will rise from 1.5% in April to a peak of 2.6% in November before dropping back in 2022 are increasingly on the upside. Rises in shipping costs and global... 10th June 2021 · 9 mins read
UK Data Response Money & Credit (Apr.) April’s money and credit data suggests that consumers were still wary about taking on any additional debt. But even if consumers’ willingness to borrow remains limited, they have enough firepower to... 2nd June 2021 · 3 mins read
UK Economics Weekly Troubles in construction unlikely to be repeated elsewhere Output in the construction sector was already 2.3% above its pre-crisis level in March and there is evidence that supply constraints are starting to bite. However, there is still plenty of spare... 28th May 2021 · 4 mins read
UK Markets Markets mistaken on when and how BoE will tighten Our forecasts that the Bank of England won’t tighten monetary policy until much later than the markets expect and that when it does it will unwind some QE first (perhaps in 2024) before raising... 24th May 2021 · 12 mins read
UK Economics Labour Market (Mar./Apr.) Today’s data release suggests that the labour market is now on the front foot. Admittedly, the unemployment rate may still rise over the rest of this year. But this will probably be due to people re... 18th May 2021 · 2 mins read
UK Economics Rapid recovery and rising inflation risks The 2.1% m/m gain in GDP in March added to other evidence that the economy is recovering more rapidly from the COVID-19 crisis than even our above consensus view had suggested. As a result, we have... 14th May 2021 · 8 mins read
UK Economics Chart Pack Rapid and robust recovery underway We’ve been more optimistic than most about the economic outlook since it was announced in November that COVID-19 vaccines were effective. But now that the COVID-19 restrictions are being removed, it... 11th May 2021 · 9 mins read
UK Economics MPC more positive, but tighter policy still some way off While voting today to leave interest rates at +0.10% and the stock of Quantitative Easing (QE) at £895bn, the Monetary Policy Committee (MPC) suggested conditions for tighter policy may be in place in... 6th May 2021 · 4 mins read
UK Economics A wave of insolvencies is coming, but not a tsunami There will be a surge in business insolvencies once the government’s moratoriums expire at the end of June and September. But a strong economic recovery should ensure that fewer businesses go bust... 5th May 2021 · 4 mins read
UK Economics Rate hikes still a long way off, despite stronger economy Given the better starting point and improving economic outlook, it would be a surprise if the Monetary Policy Committee (MPC) didn’t come out with a stronger set of economic forecasts than it had in... 29th April 2021 · 8 mins read
UK Economics UK would win the European GDP Super League If there were an economics version of the European football league, which started up and collapsed this week, where success depended on where GDP is at the end of 2022, then the UK may win with... 23rd April 2021 · 3 mins read
