- The PMI signals an almost catastrophic jobs outlook, but more reliable official data are better.
- The official employment data look more plausible to us; payrolls have stalled rather than collapsed.
- Inflation is proving stubborn, as firms increasingly pass through cost increases to prices.
Rob Wood (Chief UK Economist)UK
- In one line: Softer than feared services offset by global price pressures, further inflation acceleration lies ahead.
Rob Wood (Chief UK Economist)UK
- In one line: Seasonally adjusted house prices rise in December to cap a strong year, but house-price inflation will be even stronger in 2025.
Rob Wood (Chief UK Economist)UK
- In one line: The jobs market holds up better than expected, generating strong wage growth that will keep the MPC cautious.
Rob Wood (Chief UK Economist)UK
- In one line: Focus on the hawkish inflation forecasts, rather than the dovish vote.
Rob Wood (Chief UK Economist)UK
- In one line: Employment stagnates but disinflation is over.
Rob Wood (Chief UK Economist)UK
- The economy is in better shape than feared, after a consensus-busting 0.4% GDP gain in December.
- The next OBR forecast will be based on lower gilt yields, giving Ms. Reeves back some headroom.
- We expect payrolls to be revised up, strong wage growth, and CPI inflation to jump to 2.8%.
Rob Wood (Chief UK Economist)UK
- In one line: The BRC kickstarts the year with strong growth, we expect it to continue.
Rob Wood (Chief UK Economist)UK
- In one line: The trade deficit will be held back by high energy prices and President Trump’s tariff threats in 2025.
Rob Wood (Chief UK Economist)UK
- In one line: Looming end of stamp duty relief causes volatility, longer-term house price outlook still looks solid.
Rob Wood (Chief UK Economist)UK
- In one line:Better-than-expected growth should reduce recession worries and suggests the PMI is exaggerating economic weakness.
Rob Wood (Chief UK Economist)UK
- We are unconcerned by the strong net trade contribution to Q1 GDP growth.
- Trade figures will be revised materially, and the Q1 contribution was offset by volatile stock-building.
- Export volumes rose 1.3% quarter-to-quarter in Q1, excluding precious metals, erratics and oil.
Rob Wood (Chief UK Economist)UK
- In one line: The labour market improved marginally in January but remains hobbled according to the REC.
Rob Wood (Chief UK Economist)UK
- We still expect three rate cuts in total this year—two more—after the surprisingly dovish MPC voted to cut.
- Vote splits are a poor guide to subsequent decisions, while the MPC’s inflation forecast was hawkish.
- We expect Catherine Mann to explain this week that she was calling for a one-off rate adjustment.
Rob Wood (Chief UK Economist)UK
- In one line: The Construction PMI tanks, but was driven by erratic falls and should improve.
Rob Wood (Chief UK Economist)UK
- In one line: Payroll tax hikes boost inflation and cut growth; the MPC will have to plot a middle path.
Rob Wood (Chief UK Economist)UK
- In one line: Private car registrations fall eases in January; the trend should improve in 2025.
Rob Wood (Chief UK Economist)UK
- In one line: President Trump’s tariffs will snuff out a nascent rebound in the PMI.
Rob Wood (Chief UK Economist)UK
- In one line: House price inflation is trending higher despite the weak monthly gain in Nationwide's index.
Rob Wood (Chief UK Economist)UK
- Payroll-tax hikes are driving growth down and inflation up to a greater extent than we expected.
- We cut our 2025 GDP forecast to 1.1% year-over-year, from 1.3%, but raise inflation by 10bp to 3.1%.
- We retain our long-held call for three cuts to Bank Rate in 2025, with the first coming on Thursday.
Rob Wood (Chief UK Economist)UK
