Chief Economist’s Weekly Briefing – Trickier trade-off

So far the Bank of England’s rate hiking cycle had been made somewhat easy by the UK’s strong economic performance. But MPC members perhaps shifted in their chairs as last week’s data releases told a story of fading economic momentum and a cooling labour market. However, wage pressures remain intact, and inflation expectations have edged up. Oil’s been on an upward march of late, feeding higher prices at the pump: petrol’s at its highest level since last December. Lots to ponder ahead of Thursday’s rate decision.

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Labour supply crunch has arrived

Reflections on the labour market statistics today put in context of wider trends

Since the pandemic, the local labour market largely became the go to place for positive economic statistics. Employment at record highs and unemployment close to historic lows has been a line regularly trotted out. A cursory glance at these two statistics provides some comfort that the labour market appears to be functioning well.

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Chief Economist’s Weekly Briefing – Rocky

While the eye of the cost-of-living storm may have passed, the impact is continuing to be felt. Household spending appetite is moderating. Businesses are also turning cautious amid rising rates, holding back on major investment and staffing decisions. With the direction of policy still uncertain, this week’s GDP and labour market releases will be crucial indicators of the next move.

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NIGHTMARE ON RENTAL STREET?

It has long been known that due to affordability challenges, young people have turned to their parents for money to help fund a deposit to buy their first home. But recent figures suggest that the ‘Bank of Mum and Dad’ (BOMAD) may be running out of cash. Bloomberg’s research suggests that while many first-time buyers are still relying on their parents, more and more are turning to their siblings instead. So what does the rise of BOBAS (the Bank of Bro and Sis) tell us about the housing market?

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Chief Economist’s Weekly Briefing – Lukewarm

The heat continues to come out of the UK economy. Lending is tepid and the housing market is subdued. Meanwhile the labour market also continues to cool, suggesting that the Bank of England’s rate tightening is nearing its end. Things are not too different in the Eurozone and US, while China grapples with faltering growth.

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Chief Economist’s Weekly Briefing – Backtracking

The story of the UK’s economic resilience of 2023 is being put to the test – the impact of all those hikes in interest rates may just be beginning to more obviously weigh on growth, according to the latest PMI suveys. The situation is little better elsewhere, with the eurozone in particular exhibiting signs of weakening economic momentum.

The word or phrase backtrack in a dictionary.
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Barbenheimer economy: a beach for some, a timebomb for others

It has been something of a blockbuster summer for cinemas, with the release of Barbenheimer (i.e. Barbie and Oppenheimer) coinciding with the wettest July on record to drive people to their local movie theatres. Something similar has been happening with Bingo halls; another area that had previously been so badly affected by the pandemic. But it hasn’t been a blockbuster summer for the economy overall, with conditions in the private sector, like the weather, taking a turn for the worse. So what’s going on?

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Chief Economist’s Weekly Briefing – Beat the heat

Last week’s wage growth and inflation figures suggests that while most battles may be won, the war against inflation is not yet over. But with summer coming to an end and momentum in the economy seemingly fading, there is less wiggle room for the Bank of England, and the trade off between growth and price stability is likely to become trickier.

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