- The month-to-month rise in the core CPI in August was only 0.1pp bigger than the average in the 2010s.
- Used cars and computer games drove the large monthly gain; no sign of broad-based price increases.
- Higher energy prices will push up the headline rate to 4% in Q4 and Q1, but the MPC needn't blink.
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.
- 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.
- GDP likely held steady in July, falling short of the consensus and the level implied by the BoE's Q3 forecast.
- Surging Covid cases depressed output in the distribution, food services and education sectors.
- A decline in new Covid-19 vaccinations probably led to a reduction in output in the health sector too.
samuel tombs (UK Economist)U.K.
- The U.K. economy was hit harder by the pandemic and has struggled to catch up to the Eurozone since.
- Britain's faster rollout of vaccines led many to assume that it would close the gap with the Eurozone in Q3...
- ...But near-real-time indicators imply Q3 GDP growth actually was stronger in the Eurozone than the U.K.
samuel tombs (UK Economist)U.K.
- August's sharp fall in the composite PMI brings it in line with other indicators, which weakened in July.
- In fact, GDP likely rose at a faster rate in August than July, though it won't match its peak until year-end.
- Output prices reportedly rose at a slower pace in August, tentatively supporting the "transitory" take.
samuel tombs (UK Economist)U.K.
- The pace of month-to-month increases in consumer prices slowed in July; the re-opening surge is over.
- CPI inflation still is set to rise sharply, but the peak will be a bit below the 4% rate expected by the MPC...
- ...The MPC's food and energy price assumptions are too high, while goods inflation will fall swiftly next year.
samuel tombs (UK Economist)U.K.
- CPI inflation probably declined to 2.1% in July from 2.5% in June, below the consensus, 2.3%.
- Clothing prices appear to have fallen sharply, as usual; they dropped only marginally a year ago.
- Surveys suggest the pace of increases in catering services prices has slowed down.
samuel tombs (UK Economist)U.K.
The ONS' Business Impact of Covid-19 survey suggests business turnover has flatlined since late May.
The disruption caused by the "pingdemic" wors- ened in late July, but likely is now starting to fade.
Unemployment still looks set to jump in Q4, despite another hefty drop in furlough scheme usage in June
samuel tombs (UK Economist)U.K.
The larger-than-consensus fall in the composite PMI adds to evidence that the recovery is slowing.
The disruption caused by Covid-19 cases is only part of the story; a weaker underlying picture is emerging.
Prices still are rising sharply, but there are some early signs that the upward pressure is easing.
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.
Many indicators suggest that the economic recovery is stalling in the face of the third wave of Covid-19.
samuel tombs (UK Economist)U.K.
We now expect the MPC to end its gilt purchases immediately at next month's meeting, following last week's consumer prices data.
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.
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.
Recent indicators of economic activity are not as uniformly positive as we hoped.
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.
We were particularly struck last week by the absence of a jump in prices up on the reopening of non-essential shops and some services businesses in April.
samuel tombs (UK Economist)U.K.
The U.K. economy almost certainly was the worst performer in the G7 for a fourth consecutive quarter in Q1.
samuel tombs (UK Economist)U.K.
