- We think CPI inflation leapt to 3.1% in August, from 2.0% in July, above the 2.9% consensus.
- Core inflation likely jumped on the anniversary of the Eat Out to Help Out Scheme...
- ...But it also probably was boosted by abnormally large increases in used car and other goods prices.
Samuel Tombs (UK Economist)U.K.
- Surging Covid-19 cases largely were responsible for the near-stagnation of GDP in July.
- The virus no longer is driving labour shortages, but many remain fearful and will spend less if it picks up.
- We still look for quarter-on-quarter growth in 1.5% in Q3, half the rate expected by the MPC.
Samuel Tombs (UK Economist)U.K.
- The MPC's energy price assumptions for its inflation forecast are too high in the near-term, and for 2023.
- Wholesale electricity and natural gas price changes don't immediately impact the CPI...
- ...Future prices still imply that Ofgem will lower slightly the default tariff cap next year, not raise it further.
Samuel Tombs (UK Economist)U.K.
- Markets still expect the MPC to hike rates in Q2 2022, despite surprise plans to lift national insurance in April.
- The tax hike will defer a full recovery in households' spending to the second half of next year.
- The plans imply the Treasury does not expect the OBR to turn upbeat on the medium-term economic outlook.
Samuel Tombs (UK Economist)U.K.
- The margin by which public borrowing undershoots the OBR's forecast will narrow over coming months...
- ...Interest payments will soar, while GDP growth in Q3 and Q4 will fall short of the OBR's expectations.
- The OBR's scarring judgement looks sound; productivity and participation have been lower than expected.
Samuel Tombs (UK Economist)U.K.
- The Delta variant is to blame for July's fall in retail sales, not the rain, zeal for dining out, or alleged shortages.
- Surveys show households were less willing to visit both shops and services providers last month.
- Retailers are unlikely to benefit from any future recovery in consumers' confidence.
Samuel Tombs (UK Economist)U.K.
The proportion of staff furloughed fell to 5.7% at the end of June, from 7.5% a month earlier...
...But surveys point to only a marginal fall in early July, and still high usage in fully recovered sectors.
Firms likely won't fully relinquish recent productivity gains; the employment rate will drop back in Q4.
Samuel Tombs (UK Economist)U.K.
We continue to think that the government will need to press ahead with its planned fiscal tightening over the next two years, if it wants to ensure that borrowing drops to 3% of GDP in the mid-2020s.
Samuel Tombs (UK Economist)U.K.
Government support for businesses during the pandemic has kept the number of corporate insolvencies extremely low by past standards.
Samuel Tombs (UK Economist)U.K.
The latest activity surveys are a mixed bag.
Samuel Tombs (UK Economist)U.K.
June’s Markit/CIPS PMIs suggest that the economic recovery still has plenty of momentum.
Samuel Tombs (UK Economist)U.K.
May’s public finance figures haven’t caused us to alter our view that the government will have to press ahead with the tax rises set out in the March Budget in order to reduce public borrowing to 3% of GDP in the mid-2020s.
Samuel Tombs (UK Economist)U.K.
April's official house price data show how strongly the market has been influenced by the temporary increase in the threshold for Stamp Duty Land Tax to £500K, from £125K.
Samuel Tombs (UK Economist)U.K.
The jump in CPI inflation to 2.1% in May, from 1.5% in April, marks the start of a period of above target inflation driven by services businesses hiking prices as they reopen, as well as higher energy prices.
Samuel Tombs (UK Economist)U.K.
We’re sticking with our forecast for a 5.3% quarter-on-quarter rise in GDP in Q2 in the wake of April’s GDP report.
Samuel Tombs (UK Economist)U.K.
Tuesday's labour market report looks set to show that the unemployment rate fell further in April, though not quite as rapidly as implied by recent business surveys.
Samuel Tombs (UK Economist)U.K.
We expect April’s GDP report, released on Friday, to show that the economy continued to recover at a rapid rate in April.
Samuel Tombs (UK Economist)U.K.
While the housing market is running hot this year, remortgaging activity has remained extremely weak.
Samuel Tombs (UK Economist)U.K.
April's money and credit data suggest that the economic recovery is progressing, but not at a stellar rate.
Samuel Tombs (UK Economist)U.K.
We have detected a clear shift in the importance placed by markets on the regular macro data over the last month.
Samuel Tombs (UK Economist)U.K.
