Chief Economist’s Weekly Briefing – Constrained

July’s sharp slowdown in UK GDP growth highlighted the supply- and demand-side challenges to the recovery. Supply chain disruption continues to be widespread and staff shortages remain an issue. Meanwhile, the largest tax shake-up in a decade is aimed at solving short- (Covid) and long-term (social care and ageing) funding challenges.

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Chief Economist’s Weekly Briefing – Wind Down

Covid-19 cases are on the rise again, especially in Scotland, where schools re-started three weeks ago. More data confirming a degree of caution set in amongst consumers mid-summer – UK net consumer credit growth dropped to zero in July and the savings rate is still unusually high. Meanwhile labour shortages appear to be intensifying.

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Chief Economist’s Weekly Briefing – Softer

Supply-side bottlenecks and ongoing struggles to fill vacancies are staging to drag on the recovery. And as we learned through July, rising caseloads can quickly turn consumers cautious. An upsurge in cases as schools return (and evidence of falling vaccine efficacy as time elapses) might conspire to be the next ‘bumpy’ part of the recovery.

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Chief Economist’s Weekly Briefing – Hey, it’s complicated!

Data releases are sending out mixed signals to the Bank of England’s MPC. On the one hand, there is rising evidence of growth slowing in Q3 as consumers turned cautious and firms struggled with supply-side shortages. Yet the labour market continues to recover rapidly with any slack declining fast. The latter could push up wages for longer, risking a firming up inflation expectations.

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Chief Economist’s Weekly Briefing – A bumpy ride

The UK economy proved its resilience yet again. June GDP figure surprised on the upside despite disruptions caused by the third wave. Granted, there’s still some way to track back and July looks to have been more of a struggle. But the UK is well placed to chase down the pre-Covid level of economic output in the coming months.

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Chief Economist’s Weekly Briefing – hawkish undertone

Last week, the Bank of England decided to shake things up a little. While monetary policy was left unchanged in August, the meeting was significant as the Bank made notable changes to its outlook for both inflation and the labour market. The ‘Old Lady’ also gave new guidance on how it plans to wind down its largest ever QE programme.

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Chief Economist’s Weekly Briefing – When the going gets tough

Tis the season of Q2 growth figures. China’s growth picked up, albeit with signs of sluggishness. The US surpassed its pre-pandemic levels despite growth falling short of market expectations. The Euro area embarked on its road to recovery but below its pre-pandemic levels. So all eyes on UK GDP next week, amid signs of greater consumer caution plus a ‘pingdemic’ led slowdown in June.

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Chief Economist’s Weekly Briefing – 3 vs 2 to the doves

The recent jump in inflation and pockets of tight labour market conditions prompted two members of the Monetary Policy Committee (MPC) to indicate an earlier than anticipated tightening of policy. But with signs of softer activity three MPC members took a more ‘dovish’ stance. Looks like the Bank won’t break ranks with the Fed & ECB just yet.  

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Chief Economist’s Weekly Briefing – Freedom Day (caveated)

Freedom Day in England –  a much awaited milestone. Consumer behaviour, rather than restrictions, is in the driving seat now when it comes to gauging the recovery. But with daily cases surpassing January levels and a “ping-demic”, spending appetite might just be a little dented in the near-term. For now, the data continues to look robust. 

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Chief Economist’s Weekly Briefing – Cautious

While the data on economic activity continue to look positive, the overall mood is that of cautious optimism. Cases are on the rise in various parts of the world. In the UK the wall of vaccines is so far proving effective against a rapidly building third wave.

Yellow transportation sign post with caution word on blue sky with cloud background and have copy space
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