UK Economics Weekly Banking situation appears to be stabilising, but risks remain Even if policymakers are successful at putting a firewall around the recent problems in the global banking system, some damage to the UK economy may already have been done. And while we think... 17th March 2023 · 10 mins read
UK Economics Weekly Slimming the size of the possible recession With the hit to real activity from high inflation having been and gone and mostly absorbed by government handouts and a real terms reduction in households’ pandemic savings, we no longer think there... 10th March 2023 · 7 mins read
UK Economics Weekly Improved outlook for inflation, activity and even Brexit It may seem odd that we are revising down our CPI inflation forecast when investors’ concerns about the stickiness of inflation are growing. But the revisions are triggered by the further fall in the... 3rd March 2023 · 8 mins read
UK Economics Weekly Investors’ hawkish shift is justified We don’t think that wage growth will ease to levels consistent with the 2.0% inflation target without weaker economic activity and a rise in the unemployment rate. The recent resilience of the economy... 24th February 2023 · 5 mins read
UK Economics Weekly Domestic inflation easing, but labour market still tight The easing in core services inflation suggests that interest rates won't rise much further, perhaps from 4.00% now to a peak of 4.25% or 4.50%. But we suspect the Bank of England will need to see more... 17th February 2023 · 7 mins read
UK Economics Weekly Recession or no recession, economy will be very weak The resilience of the economy last year is probably due to a combination of the government’s support, the strong labour market and both households and businesses dipping into some pandemic savings... 10th February 2023 · 9 mins read
UK Economics Weekly Data needs to beat BoE’s forecasts for further rate hikes This week the Bank of England implied that Bank Rate is at or very close to its peak, and for further rate hikes to happen there needs to be evidence of more persistent inflationary pressures than it... 3rd February 2023 · 9 mins read
UK Economics Weekly Inflation pressures easing, but too soon to sound the all clear The data this week provided further signs that goods pipeline pressures are easing. More importantly, we’re starting to see the first concrete signs of an easing in services pipeline pressures. But... 27th January 2023 · 4 mins read
UK Economics Weekly Domestic inflation is proving persistent CPI inflation is falling, but domestic inflationary pressures are proving persistent as the labour market remains tight and wage growth remains strong. Combined with a more resilient economy than the... 20th January 2023 · 7 mins read
UK Economics Weekly Recession delayed not cancelled It’s starting to feel like a recession will never happen, but it will. Admittedly, the government may be absorbing more of the hit to national income from the surge in the cost of energy imports than... 13th January 2023 · 9 mins read
UK Economics Weekly UK’s business investment position will get even worse UK investment is already languishing well below that of its G7 counterparts and we suspect its investment and productivity position will worsen relative to its peers by the end of 2024. This raises... 6th January 2023 · 8 mins read
UK Economics Weekly Households increase savings despite falling real incomes The economy contracted by more than we previously thought in Q3 2022. But the most surprising thing we learnt was that the saving rate leapt from 6.7% in Q2 to 9.0% in Q3 as households on aggregate... 23rd December 2022 · 5 mins read
UK Economics Weekly 2023 – Key themes and possible surprises The three main economic themes of 2023 will be falling inflation, peaking interest rates and a recession. Together they add up to a tough year. Things would be much tougher if inflation surprised... 16th December 2022 · 7 mins read
UK Economics Weekly Retail recession drags on despite World Cup With retail sales volumes in November likely to have remained a little below their pre-pandemic level and 4.0% below their level at the start of the year, for retailers the recession is well underway... 9th December 2022 · 14 mins read
UK Economics Weekly BoE focus will shift from pace of rate hikes to level of rates The news that higher interest rates are starting to influence the economy will at some point soon prompt the Bank of England to start thinking more about the appropriate level of interest rates rather... 2nd December 2022 · 5 mins read
UK Economics Weekly High migration, but low labour force The most striking thing about the record rise in net migration in the year to June 2022 is that it has not prevented the decline in the labour force. Without the rise in net migration, the labour... 25th November 2022 · 4 mins read
