Chief Economist’s Weekly Briefing – From Alpha to Omicron

Concerns over the spread of the new Omicron variant prompted the UK to reintroduce restrictions on travel and mask-wearing this week. Difficult decisions lie ahead for the Bank of England, which must balance a potential knock to the economic recovery with evidence of increasingly widespread cost pressures and tight labour market conditions. The odds of a rate hike at next month’s Monetary Policy Committee meeting may be receding but the jury is still out.

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Chief Economist’s Weekly Briefing – All about inflation

Rising prices are once again the hot topic, with inflation surging to 4.2% in October, ahead of expectations. Labour market data were also stronger than expected, with employment rising despite the end of furlough. Pressure is building for the Bank of England to tame rising inflation, which points towards a pre-Christmas hike next month.

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Chief Economist’s Weekly Briefing – Headwinds

We’re getting there. Last week’s GDP data showed we’re just 0.6% below the pre-pandemic peak in output. At a far less progressed stage is the climate transition. But amidst the concerns was much progress from COP26. The challenge for both the recovery and achieving net zero is to keep up the momentum in the face of multiple headwinds. 

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Chief Economist’s Weekly Briefing – Spending Spree

The Chancellor revealed that the UK economy has turned out better than expected in recent months. Cue some meThe Chancellor revealed that the UK economy has turned out better than expected in recent months. Cue some measures to support the lower paid amidst a cost of living crisis. Welcome support that provides additional confidence around the recovery. But what about measures to support the path to net zero?

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Chief Economist’s Weekly Briefing – More to come

Inflation remains firmly in focus as we move deeper into Autumn. September saw a slight softening in price pressures. But it’s a pause before a re-acceleration as higher energy prices bite. In the longer-term, electric vehicles and a decarbonised power system are important remedies. So they are welcome pledges in the government’s Net Zero Strategy.

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Chief Economist’s Weekly Briefing – Fragile

The revision to Q2 GDP indicated that the economy is closer to its pre-pandemic level of output than previously thought. So, while the list of challenges to the recovery mounts – labour, fuel and components shortages, high inflation, soaring energy prices and rising taxes – at least we know the economy faces them with good momentum.

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Chief Economist’s Weekly Briefing – Slowing

The Monetary Policy Committee kept official interest rates unchanged last week, as expected. The big determinant of when they do move will be the the labour market reaction to the end of the furlough scheme. In the meantime, soaring energy prices, rising inflation and worker shortages are continuing. The challenges to the recovery are mounting. But adults in Northern Ireland will have £100 from the High Street Voucher Scheme to soften the blow.

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