UK Economics Weak activity news likely to stave off rate hike On the back of the surge in inflation in August and the blistering increases in wholesale gas and electricity prices, investors and some economists have shifted their expectations of the first rate... 17th September 2021 · 6 mins read
UK Economics Economic recovery enters a more challenging phase The economy is entering a more challenging phase of its recovery from the pandemic as it is having to deal with another rise in COVID-19 cases and both product and labour shortages. We think the... 10th September 2021 · 7 mins read
UK Economics Weekly From not enough jobs to not enough workers It’s remarkable how quickly the fear keeping policymakers awake at night has shifted from there being too many people out of work to there not being enough people to fill all the vacant jobs... 3rd September 2021 · 7 mins read
UK Economics Weekly Shortages threatening to stifle the recovery The list of anecdotal reports of labour and product shortages has grown ever longer in the past week and pose two major risks to the economy. First, that the near-term recovery will be slower than we... 27th August 2021 · 4 mins read
UK Economics Weekly Inflation concerns, economy off to a bad start in Q3 The latest batch of labour market data will have done little to ease the Monetary Policy Committee’s (MPC) concerns that the coming rise in inflation could be sustained in 2022. But we are not... 20th August 2021 · 5 mins read
UK Economics June’s resilience won’t last as virus disruptions hit The 1.0% m/m rise in GDP in June was an impressive result. But we suspect that GDP growth in Q3 will be closer to 2.0% q/q than the 2.9% q/q forecast by the Bank of England. And we still think that... 13th August 2021 · 8 mins read
UK Economics Weekly What we learnt, and didn’t learn, from the BoE We learnt three things from this Thursday’s Bank of England policy decision and were left in the dark on two key issues. As a result, some of our forecasts for money market rates and gilt yields have... 6th August 2021 · 8 mins read
UK Economics Weekly At risk of stalling, but Q3 may make up for Q2’s weakness This week brought further signs that the “pingdemic” weighed on economic activity and evidence that in June, consumers amassed excess savings at a faster rate than in May. As a result, there’s clearly... 30th July 2021 · 3 mins read
UK Economics Hit to GDP from pingdemic not huge, but unhelpful We estimate that the “pingdemic”, which has contributed to 1.1 million people self-isolating in the week ending 14 th July, could reduce monthly GDP by 0.5-1.0% and is surely exacerbating the current... 23rd July 2021 · 3 mins read
UK Economics New BoE and gilt yield forecasts This week’s signs that two members of the Monetary Policy Committee have become more worried about the upside risks to inflation have led us to bring forward our forecast of when policy will be... 16th July 2021 · 7 mins read
UK Economics Less scarring means lower inflation and higher tax revenues The bigger and longer-lasting rises in commodity and component costs means that we now think that CPI inflation will rise to a peak of 4.0% at the turn of the year. But if we are right in thinking the... 9th July 2021 · 6 mins read
UK Economics No need to fear as furlough enters final furlong We think that concerns about the winding up of the furlough scheme are overdone for two reasons. First, at the end of May only 2.3m people were on furlough and half of them were working at least some... 2nd July 2021 · 7 mins read
UK Economics Weekly BoE’s less hawkish stance relative to the Fed likely to persist With few signs the Fed’s hawkishness at its May meeting has spread to the Bank of England, we think that the downward revision to market interest rate expectations has much further to go. While we... 25th June 2021 · 7 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 Inflation fears, Euro 2020 hopes The mounting evidence that price pressures are rising is a threat to our forecast that CPI inflation won’t spend a long time above the 2% target until late in 2023. The good news, though, is that if... 11th June 2021 · 7 mins read
UK Economics Weekly Households still amassing excess savings, 3rd wave fears We don’t think that consumers’ reluctance to pay for their purchases on plastic, or their still-elevated cash holdings, are signs that they will be less willing to spend in the future. Meanwhile, the... 4th June 2021 · 7 mins read