1 Sept 2022 UK Monitor Capex will Continue to Recover, Despite the Risk of Recession

• Business investment rose again in Q2, as key uncertainties faded and supply constraints began to ease.
• We expect a further rebound in H2; balance sheets are strong and investment intentions still are high.
• But we doubt capex will return to its pre-Brexit share of GDP; the U.K is a less desirable place to invest.

Gabriella DickensU.K.

26 Aug 2022 UK Monitor It's Not all Bad News on the Inflation Front

We expect Ofgem to announce today that the default tariff cap will increase by 80% in October.

This will boost CPI inflation by 4pp, assuming the ONS treats the government's grant as a fiscal transfer.

Core goods inflation, however, is set to fall sharply this winter; manufacturers and retailers have excess stock.

Samuel Tombs (UK Economist)U.K.

24 Aug 2022 UK Monitor Flash PMIs Suggest the Economy is Stagnant at Best

August’s PMIs suggest the recovery has petered out, with the manufacturing sector heading into recession.

Employment growth also has come off the boil, while price pressures mostly have continued to ease.

All this suggests the MPC have room to act with caution; a 50bp hike is not the done deal assumed by markets.

Samuel Tombs (UK Economist)U.K.