- Year-over-year growth in house prices slowed in July, following the tapering of government support.
- Expect a further slowdown in Q4, when the SDLT threshold will return to £125K and real incomes will fall.
- The outlook for 2022, however, is brighter; falling mortgage rates and tight supply will support prices.
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.
Car demand surged in Q2, as easing Covid-19 restrictions boosted consumers' confidence.
But shortages of key components have limited the supply of new cars; used car sales have surged.
Used car sales look set to remain elevated this year, pushing up prices.
samuel tombs (UK Economist)U.K.
By the autumn, vaccination rates no longer will be higher in the U.K. than other advanced economies.
The chances of U.S. and U.K. rates rising in lockstep are remote; the U.S. recovery is far more advanced.
U.K. political risks are low now, but next year investors will start to weigh the risks from the 2024 election.
samuel tombs (UK Economist)U.K.
Covid-19 cases likely will pick up in September, as schools return and building ventilation declines.
Business closures in Q4 aren't likely, but households will remain cautious, delaying a full recovery.
In the event of a new variant and lockdown, we think the MPC would cut rates to -0.25%, despite 4% inflation.
samuel tombs (UK Economist)U.K.
The slowdown in consumer credit gross lending in June suggests monthly GDP growth slowed.
Households remained cautious; last month liquid assets increased at a faster rate than pre-Covid.
Businesses increased their net external finance for the first time since February; a positive sign for capex.
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 story of the U.K. economy's underperformance relative to its international peers remains intact after the Q1 national accounts.
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.
With CPI inflation edging above the MPC's 2% target in May and set to approach 3% later this year.
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.
It remains our view that employment and wages will not rise rapidly enough over the 18 months to prompt the MPC to hike Bank Rate.
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.
While the housing market is running hot this year, remortgaging activity has remained extremely weak.
samuel tombs (UK Economist)U.K.
Recent indicators of economic activity are not as uniformly positive as we hoped.
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.
The public finances are healing faster than the OBR expected, though April’s figures are not quite as good as they appear at first glance.
samuel tombs (UK Economist)U.K.
Financial markets are relatively upbeat on the outlook for British retailers. The FTSE All-Share Retailers Index closed last week 27% above its 2019 average, greatly outperforming the total FTSE All- Share Index, which has only just recovered to its 2019 level.
samuel tombs (UK Economist)U.K.
