UK growth rebounded in Q2, but outlook is clouded Unimpressive. Latest monthly GDP figures confirmed the UK economy recovered from a weak Q1, posting an unimpressive 0.4% rise in Q2, matching market expectations. Over H1 2018, GDP growth was unchanged from the last six months in 2017. Indeed, with services output, the main contribution...Read More
Striking. What a difference a month makes. Not the football. This is an economics update after all. UK GDP grew by 0.3% between April and May, strong enough to lift the three-monthly growth rate from nothing to 0.2%. So, even very moderate growth in June, which seems likely, and the UK will match its post-2000...Read More
The MPC voted unanimously to raise interest rates and the Fed looks like it is warming up for more of the same Rate hike ahoy! The Bank of England’s Monetary Policy Committee raised rates by 0.25%, to 0.75%, noting that the UK economy’s Q1 slowdown looks increasingly like a temporary soft patch. There were...Read More
The economic data is hinting at an impact from trade tensions. But it’s very modest, so far at least Trade tensions. Any signs they’re impacting the economy? Some, but they’re modest so far. Global trade growth has been slowing, but other factors are at play, namely cooler economic growth in the euro area. Businesses in...Read More
The labour market continues to strengthen but wage growth refuses to escape its sluggish trajectory Strong and stable: UK labour market conditions continue to improve. Witness the 137k rise in employment in the three months to May, a 4.2% unemployment rate and a record high for the employment rate (75.7%). Yet wage growth remains...Read More
An upbeat speech from Bank of England governor Mark Carney shortens the odds of an August rate hike Bullish Carney. Bank of England governor Mark Carney’s latest speech was upbeat about the UK economy, increasing the likelihood of an August rate hike. He downplayed disappointing Q1 GDP, highlighting the adverse impact of poor weather on...Read More
Pressure eases on public finances, but not enough to finance a big Birthday gift without recourse to higher taxes. Honey, Hammond, I shrank the deficit. Another welcome surprise for UK public finances, with the amount of borrowing needed to plug the deficit falling by £5bn in May. £2bn lower than a year earlier. We’ve just...Read More
Big, expensive, marred by controversy and inherently political. No, not the World Cup. QE. And the final whistle for this extraordinary period for monetary policy is approaching. At least for this round. And there’s always the chance of extra time. Widespread Weakness. Concerns are rising about the performance of the UK economy in Q2....Read More
A reversal of fortune in the service sector should hair a return to business as usual for the UK economy. Pressure building. Confidence returned to the UK service industry in May with its PMI reaching 54.0, up from 52.8 in April. That’s the second month of recovery since the snow-induced slowdown and bodes well...Read More
Despite strong investment, record employment and (finally) real pay growth, weak spending slows the economy. Hiring on all cylinders. The UK’s well-oiled jobs machine continues to produce the goods. Another month, another record high in employment and the employment rate. The number of people in work rose by 197k in Q1, taking the total to...Read More
