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 – Good News?

The UK economy ended the first half of the year on a positive note, performing better than expected. Consumer spending and business investment picked up in the second quarter and firms were resilient to industrial action. Whether this will be the start of a steady recovery, or if the cheer will prove short lived, as higher rates bite, remains to be seen.

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Chief Economist’s Weekly Briefing – Falling Short

There was some respite for the UK economy last week, with headline and core inflation falling in June. The  news around broader economic activity was slightly less cheery, even if retail sales held up. It seems the private sector’s recovery is losing steam. Enough to limit the Bank of England to a 25bps rise next week, rather than 50?

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Chief Economist’s Weekly Briefing – Beleaguered

Although the UK economy has fared relatively well in the first half of the year, several headwinds persist, both for short-term and medium-to-longer-term performance. Foremost amongst the latter is the sustained weakness in productivity. Meanwhile the inflation outlook is uncertain with wages and prices still chasing one another upward. With the final destination for interest rates unknown, the hoped for economic ‘soft-landing’ still can’t be banked on.

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Are we there yet? Yeah but no but

Portrait of a Professional Industry Engineer Worker Wearing Uniform in a Factory. Industrial Specialist Standing in industrial Facility. Created using generative ai technology

After an economic shock, we tend to closely watch whether a particular indicator has returned to its pre-shock levels over the months and years that follow.  Since the pandemic occurred economists and commentators have been asking “are we there yet?”  Have we returned to pre-pandemic levels? Depending on the frequency of the specific statistic (monthly / quarterly), the benchmark has been pre-March 2020. For quarterly data, Q4 2019 is invariably the timestamp to compare economic progress.

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Chief Economist’s Weekly Briefing – The long haul

Two weeks in and has the bad news poured in? Well not yet, but there’s plenty to be concerned about. Did the UK end 2022 with a recession? It may have just been averted (not so in NI). But the base case is it has only been delayed. What’s certain is that the cost-of living crisis is far from over, and borrowing costs will rise further before they come down. Businesses and mortgage owners, brace yourselves. The good news is the £600 energy vouchers for local households are in the post. But there’s still a long and bumpy ride left to run.

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Chief Economist’s Weekly Briefing – Autumn Austerity

Last week’s limelight was on Chancellor Hunt who delivered a much-awaited path for fiscal consolidation. While this should assuage financial market concerns and pressure on the BoE to tighten rates, households will be hit hard. Sure, the OBR seems optimistic about the pace of recovery but that won’t materialise anytime soon. Plus, energy bills will rise again in April. More tough times ahead.

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Bad medicine is what we need…

We’re well known in this part of the world for bemoaning the weather. But in recent times, it’s prices that we have been lamenting in our chit-chat with neighbours and in the pub. And that’s not surprising given the vast increases in the cost of things like gas and electricity that we have seen. To put this in context, if beer prices had increased at the same rate as gas, we’d now be paying about £40 a pint in some establishments.

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New era of household austerity awaits

We’ve heard lots of recent comparisons between today and 1976, given the heatwaves and drought that affected both years, and that 2022 is the UK’s driest year since. But whilst we have recently been basking in sunshine and dealing with the impact of the warm weather, it is the cost of heat, light and food for households this winter that should be on all of our minds.

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