UK Economy

UK borrowing reaches £128bn in the past three months

June’s UK public finance data were better than expected, with slower growth in spending suggesting that government support was dialled down as the economy reopened. However,...

UK wage growth moves into negative territory

Yesterday’s UK labour market data showed that the damage from COVID-19 has been remarkably light, with unemployment still at 3.9% but clearly suppressed by the success of Rishi...

Sunak plans £30bn stimulus but also end to furlough scheme

Rishi Sunak faces a difficult balancing act, announcing a further £30bn (1.4% of GDP) stimulus yesterday (July 8th) but insisting the job furlough scheme will end in October. Sunak will...

UK GDP contracts by 20% in April

The news this morning that UK GDP contracted by 20% in April isn’t quite at the most pessimistic end of expectations but will probably lead many forecasters to revise down their...

UK claimant count surges in April

Yesterday (May 18th) saw France and Germany outline their proposals for a new €500bn European Commission fund to provide grants to EU countries hit by COVID-19. This morning’s UK...

UK GDP contracts by 5.8% in March

The news that UK GDP fell by 5.8% in March was not as bad as the 8% decline expected, but still points to an unprecedented 20%+ fall in activity in April given the lockdown was imposed...

Is the PEPP big enough?

The consensus is that no substantial change is likely at either today’s Federal Reserve or tomorrow’s ECB policy meetings. The key issue for Jay Powell is whether the Fed may loosen...

UK public sector borrowing deteriorates in March

This morning’s figures for March show COVID-19 starting to hit the public finances, with the UK borrowing £3.1bn, ahead of expectations, and spending up 12% on the year. This is before...

Sunak’s sugar rush Budget

Yesterday’s UK Budget giveaway was the largest since 1992, with £30bn (or 1.4% of GDP) of spending and tax cuts – leading to a deficit of 2.8% of GDP in 2021. The Office for Budget...

Bank of England cuts rates ahead of giveaway UK budget

The Bank of England has cut rates to 0.25% this morning, alongside reducing the counter-cyclical capital buffer to zero and announcing a new term funding scheme. This comes ahead of...