14 Sept 2022 UK Monitor Wage Growth Remains too High for the MPC, But that will Change in 2023

• Employment has stopped rising, but labour market slack hasn't accumulated, due to increasing inactivity.
• We expect labour demand to remain flat but the workforce to grow, as immigration and participation recover.
• For now, wage growth is too hot for the MPC, but building slack and falling CPI inflation will slow it in 2023.

Samuel Tombs (UK Economist)U.K.

12 Sept 2022 UK Monitor Labour Market and Retail Sales Data to Persuade the MPC to be Cautious

• Business surveys and vacancy data point to another negligible rise in payroll employees in August.
• Wage growth likely remained slightly too strong for the MPC, but probably didn't gain more momentum.
• BRC data point to a below-consensus fall in retail sales in August; the MPC won't up the hiking pace.

Samuel Tombs (UK Economist)U.K.

7 Sept 2022 UK Monitor July GDP to Show the Economy has Slowed, but is Not in Recession Yet

• We look for a modest 0.3% month-to-month rise in July
  GDP, leaving it only 0.1% up from three months earlier.
• The composite PMI has pointed to stronger growth, but it excludes the distribution and health sectors.
• Revised GDP estimates later this month likely will show that economic activity still is below its pre-Covid peak.

Samuel Tombs (UK Economist)U.K.

6 Sept 2022 UK Monitor How will Energy Price Interventions Impact the Inflation Outlook?

• Ms. Truss has been tight-lipped about her plans, but a
  trade body plan to freeze prices is gaining traction.
• If implemented, CPI inflation will return to the 2% target in 2023, easing the pressure for further big rate hikes.
• Firms need help too, though we think Ms. Truss will cut business rates and provide grants, not reduce VAT.

Samuel Tombs (UK Economist)U.K.

17 Aug 2022 UK Monitor Labour Market Slack will Continue to Build, Easing Wage Pressures

Growth in employment in the three months to June undershot the consensus by the most in nearly two years.

The workforce, by contrast, is finally picking up, assisted by a recovery in immigration, which will be maintained.

Vacancy and payroll employee data indicate labour demand is stagnating; unemployment will rise further.

Samuel Tombs (UK Economist)U.K.

22 June 2022 New Estimates of the Distribution of Households' "Excess Savings"

Estimates of the distribution of savings can be derived by reconciling data from a few ONS surveys.

Our calculations suggest households in the top 10% of the income distribution hold 25% of the excess savings.

The current wave of rail strikes do not meaningfully increase the risk of a recession this year.

Samuel Tombs (UK Economist)U.K.

18 May 2022 The Latest Wage Growth Figures Won't Make the MPC Panic

• Average wages in Q1 were boosted by bonuses; ex-bonus growth has merely matched the MPC’s forecast. 
• The sharp rise in average hours has boosted weekly wages too; underlying pay pressures are manageable.
• We expect the labour market to stop tightening soon, as both the participation rate and immigration rise.

Samuel Tombs (UK Economist)U.K.