2 Aug 2022 UK Monitor Forecast Review: Fiscal Policy and Lower Saving Likely to Avert Recession

We have revised up our forecast for Q4 CPI inflation by 1.0pp since early July; energy prices have surged again.

But we have revised down our forecast for the level of GDP by only 0.5pp in Q4; fiscal policy will respond.

People also have shown more willingness to deplete savings; we still expect a recession to be narrowly avoided.

Samuel Tombs (UK Economist)U.K.

24 Feb 2022 Labour Supply will Pick Up This Year, Keeping Wage Pressures in Check

• We think that year-over-year growth in the workforce will pick up to 1.0% by the end of 2022...
• ...Driven by the reversal of half of the rise in inactivity since early 2020, and a recovery in immigration.
• The number of hours workers are willing to supply also will rise in response to the drop in real wages.

Samuel Tombs (UK Economist)U.K.

16 Feb 2022 Labour Market Data Suggest the MPC Needn't Hike Aggressively

• The labour market is tight on every measure, but employment growth is slowing and wages aren't soaring.
• The first estimate of month-to-month growth in employee numbers in January was the lowest since April.
• Wages will be supported by low unemployment, but undermined by higher taxes and slowing job moves.

Samuel Tombs (UK Economist)U.K.

11 Feb 2022 Mortgage Rates will Rise Further, Slowing the Housing Market

• The average rate for a two-year fixed rate mortgage, with a 75% LTV ratio, likely will leap to 2.1%, from 1.6%.
• This increase won't be a problem for most refinancers, but it will impact affordability for new homebuyers.
• Next week's labour market data will show Q4's small drop in employment is on course to be reversed in Q1.

Samuel Tombs and Gabriella DickensU.K.

3 Feb 2022 Will Supply Constraints Continue to Ease, Reducing Inflation Risk?

• Supply chain disruptions, bottlenecks and goods and labour shortages have limited the recovery...
• ...But the last month has brought signs of progress of all fronts, despite the surge in Covid-19 infections.
• Supply disruptions should continue to ease, but labour shortages probably will be more persistent.

Gabriella DickensU.K.