UK Economy
Slower UK inflation paves the way for a rate cut in May
UK inflation declined to 2.6% in March. While still above target, the Bank of England is likely to take comfort from a slower path for services inflation compared to its latest forecast. A...
February GDP gains from a pre-tariff manufacturing boost
While growth in February’s GDP was well above expectations, this was driven by a pre-tariff manufacturing boost. Despite an otherwise hawkish backdrop, we now expect the Bank of...
Government banking on growth to avoid future welfare cuts
There were few surprises in the Spring Statement as weaker growth and higher borrowing costs limited the Chancellor’s scope for new policies. Well-flagged adjustments to last...
Services disinflation boosts the case for Bank Rate cuts in 2025
UK inflation declined marginally in December, helped by services price disinflation. This marks an improvement on recent months, especially for a subset of non-volatile services (excluding...
Invest, invest, invest: Labour’s plan to restore UK growth
Labour’s first Budget since 2010 was delivered this afternoon by Chancellor Rachel Reeves. Higher investment has been facilitated by a new fiscal rule targeting a broader measure of...
Grounds for optimism about the UK economy in H2 2024
The UK economy was flat in June and grew 0.6% in Q2, in line with consensus forecasts. However, we believe there are grounds for optimism heading into the second half of the year....
UK services inflation slows in July
UK inflation was lower than expected in July, driven by slower services inflation, which grew 5.2% in year-on-year (yoy) terms. This supports the view that disinflation is progressing and...
Services inflation stays high at 5.7% in June
UK consumer price inflation (CPI) grew 2% year-on-year (yoy) in June. Services inflation has been in focus ahead of the Bank of England’s next monetary policy meeting on August 1st....
UK GDP beats expectations for May
UK GDP bounced back from a weaker April, with month-on-month (mom) growth of 0.4% in May. This was double the consensus expectation for growth of 0.2%. At face value, there is no...
UK PMI surveys point to recession in H2 2023
Last week’s flash UK composite PMI at 46.8 in September shows the clear risk of recession in H2 2023, on past form consistent with a 0.4% quarterly fall in GDP. Worryingly, the PMI...
