UK Economics Weekly Tide turning to earlier rate cuts, but BoE to cut last Investors now think the first interest rate cut will happen in June next year instead of August, with an 80% chance of a cut by May. Our forecast is that the Bank of England won’t cut interest rates... 8th December 2023 · 10 mins read
UK Economics Weekly Cooling labour market will be crucial for rate cuts The possibility that the labour market is tighter than it looked has placed a question mark over when the Bank of England will be able to cut interest rates. Our forecast for services inflation and... 1st December 2023 · 4 mins read
UK Economics Weekly Low tax/low spending rhetoric is fiscal fiction It’s true that the Chancellor’s pre-election splurge unveiled in this week’s Autumn Statement was the biggest tax-cutting package since 1988. But the reality is that the tax burden is still set to... 24th November 2023 · 4 mins read
UK Economics Weekly What the Chancellor won’t tell us The Chancellor will squeeze as much political juice out of Wednesday's Autumn Statement to try and regain the agenda ahead of an election next year. But he won't tell us that bigger pre-election... 17th November 2023 · 7 mins read
UK Economics Weekly Impact of higher rates spreading beyond housing Whether or not Q3 marked the start of a recession, the recent resilience of the economy appears to be fading as the drag from higher interest rates grows. The weakness in the housing market has... 10th November 2023 · 8 mins read
UK Economics Weekly Doth the Old Lady protest too much on rate cuts? The surge in business insolvencies and slump in M4 money growth suggest that the Bank of England maybe protesting too much when it stressed this week that interest rate cuts are far away. But the Bank... 3rd November 2023 · 8 mins read
UK Economics Weekly Eroding trust in data leaves policymakers in a bind In recent months there has been a growing number of question marks over the accuracy of key economic data. As a result, it’s more important than usual to not put too much weight on any one indicator... 27th October 2023 · 5 mins read
UK Economics Weekly Optimism on inflation, fiscal challenges for next government Although we still think that the UK’s inflation problem will dissipate slowly rather than suddenly and the situation in the Middle East poses an upside risk to our inflation forecasts, leading... 20th October 2023 · 6 mins read
UK Economics Weekly Upside inflation risks dominate, Labour’s investment plans The upside risks to oil and gas prices triggered by the conflict between Hamas and Israel will add to the Bank of England’s concerns about whether it has done enough to reduce inflation to the 2%... 13th October 2023 · 8 mins read
UK Economics Weekly Bond market sell-off already hurting the economy The rapid rise in the 30-year gilt yield has lifted it to a 20-year high but, while striking, so far the speed of the increase is slower than in the run-up to the liability-driven investment crisis... 6th October 2023 · 8 mins read
UK Economics Weekly Pressure on the pound to persist We think the markets are wrong to expect the Fed to keep interest rates at their peak for almost as long as the Bank of England. If so, then the recent downward pressure on the pound from the decline... 29th September 2023 · 5 mins read
UK Economics Weekly Electoral cycle to keep rates high, but deepen cuts in 2025 A loosening in fiscal policy next year ahead of a possible election in late 2024 is another reason to think that the Bank of England will keep rates at their current level of 5.25% until late in 2024... 22nd September 2023 · 6 mins read
UK Economics Weekly Employment starting to buckle We’ve been encouraged by the signs that employment is weakening and the labour market is loosening a bit more markedly. What’s more, forward-looking indicators point to employment growth deteriorating... 15th September 2023 · 9 mins read
UK Economics Weekly A more promising outlook for productivity While we don’t think the recent upward revisions to GDP and productivity will prevent the UK economy from performing worse than most expect over the next year or so, we think there are genuine reasons... 8th September 2023 · 9 mins read
UK Economics Weekly BoE to talk up high for long This week the Bank of England’s Chief Economist, Huw Pill, said that he didn’t think interest rates will rise much further from 5.25% now but that rates are likely to stay high for a long time. We’re... 1st September 2023 · 4 mins read
UK Economics Weekly Interest rate medicine is starting to work The phasing out of the government's support packages and the growing drag from higher interest rates probably explain why the economy appears to have lost momentum in recent months. Since these drags... 25th August 2023 · 4 mins read
