Economic
This week’s UK data unlikely to prevent a March rate cut
The UK economy continues to exhibit disinflationary trends. The economy grew by less than expected in Q4; the labour market continues to loosen as wage growth declines rapidly; and...
December payrolls recover strongly from a soft November
Today’s employee payrolls data for December registered a strong recovery on the month after an unusually soft result for November. This is in keeping with our analysis of the revised...
Upside surprise in January payrolls after a flat 2025
Nonfarm payrolls surprised to the upside for January. However, in the context of a weak result in 2025 with little net jobs growth across the year, it remains unclear whether the US...
Challenges mount for an embattled UK government
Speculation has been mounting that the UK could soon have a seventh prime minister within the past decade, and GDP data out this week for Q4 is not expected to provide much by way...
Taxes are still likely to exceed official forecasts this year
Exchequer returns for January showed a slowdown in core tax receipts. However, the 2025 results exceeded Budget 2026 forecasts, and tax receipts this year would now need to be...
Housing output jumped 20% last year, meeting our forecast
Completions came in ahead of consensus and in line with Davy forecasts after a very strong seasonal Q4. Our approach takes the commencements profile of houses and apartments...
Exchequer returns point to a strong economy into 2026
December’s exchequer returns saw another strong increase in corporation taxes, up €1bn on the same month last year. This is very similar to the increase seen in July and the results...
Entire 2025 surplus explained by November’s corporation tax
Exactly as we forecast five months ago, November’s corporation tax reached €10bn – equivalent to the entire projected surplus this year in last month’s Budget. Strong growth for...
More rate cuts likely after the UK economy weakened in Q4
This morning’s GDP data for the UK paint a similar picture to the prior year, with growth in the first half considerably stronger than in the second half of the year. The Q4 result was...
UK inflation lands well below consensus in November
Annual UK inflation fell well below consensus expectations in November, reaching 3.2% compared to a 3.5% consensus figure. The declines were quite broadly based, and core inflation also...
Budget doubles fiscal headroom with backloaded fiscal drag
As expected, Chancellor Rachel Reeves delivered another difficult UK Budget. However, the details of the Budget were unexpectedly leaked prior to her speech. Nonetheless, the UK bond...
Below-consensus inflation in September
While UK consumer price inflation remained high last month, it was softer than expected across a broad range of goods and services. This follows last week’s labour market data which...
