Boris Johnson fired the starting pistol for a major jab fest over the next three weeks in what could be dubbed the jab before the storm. It comes at a time when the UK’s recovery appears to have stalled in October as firms struggled with supply chain problems and staff shortages even pre-Omicron. Reintroduction of restrictions to curb spread of Omicron, will hit travel and hospitality sectors the hardest again. October’s slowdown will further complicate monetary policy dilemma, and the prospects of a delaying a rate hike this week are strengthening.Continue reading
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.Continue reading
Chief Economist’s Weekly Brief – Shifting gears
As the data points to the initial post-Covid economic liftoff continuing, attention has turned squarely to limiting further economic fallout and encouraging the recovery. Last week Chancellor Sunak targeted support at the jobs market. This week European leaders meet to approve a proposed €750bn coronavirus recovery package. Expect plenty more in the coming months as the scale of the recovery challenge becomes ever more apparent.Continue reading
Chief Economist’s Weekly Brief – Stagnating?
An unexpected decline in April GDP, driven by sharply weaker manufacturing activity, has increased the risks of UK growth stagnating, or even contracting, in Q2 2019. Still, continued favourable labour market conditions remain a key support for the resilient consumer, lessening the risks of a more pronounced downturn.
Weekly Brief – May’s Brexit deal hangs by a thread
Following the recent Grieve amendment, the chances of Parliament passing PM Theresa May’s Withdrawal Agreement tomorrow look very slim. A rejection would force Mrs May to unveil a Plan B next Monday. An array of outcomes is possible with an increasing chance of Article 50 being extended.
Weekly Brief – Temporary spurt
UK GDP growth picked up in Q3 but this bounce is likely to be fleeting, judging from latest downbeat business surveys.
Chief Economist’s Weekly Brief – Encouraging signs
Latest monthly UK PMI surveys were upbeat, hinting at firmer Q3 GDP. Increasing skill shortages suggest a pick-up in wage growth in coming months, supportive for cash strapped consumers.
Chief Economist’s Weekly Brief – Cloudy
Some crumbs of comfort for the UK economy, but the outlook remains uncertain
Chief Economist’s Weekly Brief – The fall
UK businesses appear in decent shape. Turnover is up as are Corporation Tax receipts. Yet sterling has lost roughly one-tenth of its value since June and that’s raising input costs and squeezing profits. A long summer of falling costs boosting profits is coming to an end. Continue reading
Chief Economist’s Weekly Brief – Rebound means rebound?
A decent month which saw a rebound in trade and a decent year for industry still leave gaps in both. The trade deficit remains at near-record levels while industrial output is 7% lower than it was a decade ago. The first gap is the more significant. Continue reading