- In one line:Economy grinds to a halt as Budget uncertainty and tariff threats weigh on businesses.
Rob Wood (Chief UK Economist)UK
- In one line: Consumers’ confidence grinds higher in December.
Rob Wood (Chief UK Economist)UK
- The December PMI shows firms cutting hiring and raising prices in the wake of tax hikes and tariff threats.
- Manufacturing growth has been hit hard by tariff worries; services are rebounding as uncertainty falls.
- The re-emerging output-inflation trade-off will keep the MPC cutting interest rates only gradually.
Rob Wood (Chief UK Economist)UK
- Budget uncertainty, Mr. Trump’s tariff threats and a weak consumer hit October GDP.
- We lower our Q4 GDP growth forecast to 0.2% quarter-to-quarter; downside risks are building.
- The MPC will still be cautious; inflation expectations surged in Q4 to their highest since May 2022.
Rob Wood (Chief UK Economist)UK
- Falls in business surveys driven by Budget uncertainty have been exacerbated by Mr. Trump’s tariff threats.
- Uncertainty will persist given Mr. Trump’s election, posing downside risk to our UK growth forecasts.
- But growth will hold up better than business surveys suggest, as they are overreacting to policy worries.
Rob Wood (Chief UK Economist)UK
- In one line: The RICS roars higher as buyers rush to beat stamp duty changes and the MPC’s second rate cut feeds through.
Rob Wood (Chief UK Economist)UK
- We expect the MPC to vote eight-to-one to keep Bank Rate on hold at next Thursday’s policy meeting.
- Weakening business surveys and stalling job gains need to be set against firm wage and inflation signals.
- The new shocks hitting the economy are stagflationary, which will keep the MPC cautious.
Rob Wood (Chief UK Economist)UK
- Tobacco duties and base effects will drive up CPI inflation to 2.6% in November, from 2.3% in October.
- CPI services inflation should tick up to 5.1% in November, above the MPC’s 4.9% forecast.
- We see upside risk to our forecasts for airfares and accommodation services.
Rob Wood (Chief UK Economist)UK
- Business and consumer surveys suggest hiring paused before the October Budget.
- We assume unchanged payrolls month-to-month in November, and the October jobless rate held at 4.3%.
- A strong DMP survey points to 0.3% month-to-month private-sector ex-bonus AWE growth in October.
Rob Wood (Chief UK Economist)UK
- In one line: The REC weakens in November as the Budget tax hikes bite.
Rob Wood (Chief UK Economist)UK
- We expect GDP to rise 0.2% month-to-month in October, despite a fall in retail sales.
- Professional services should rebound, and a jump in GP appointments signals strong healthcare growth.
- We still expect GDP to grow 0.3% quarter-to-quarter in Q4, but risks lie to the downside.
Rob Wood (Chief UK Economist)UK
- In one line: The PMI falls, but it will rebound after the Budget.
Rob Wood (Chief UK Economist)UK
- In one line: The Budget hit sentiment, but we take some encouragement from the large upward revision to the PMI.
Rob Wood (Chief UK Economist)UK
- In one line: S Payroll tax hikes boost inflation more than they cut wages.
Rob Wood (Chief UK Economist)UK
- In one line: The Budget keeps construction growth solid for now, but boosts inflation pressure and cuts optimism.
Rob Wood (Chief UK Economist)UK
- In one line: Signs that private demand is turning.
Rob Wood (Chief UK Economist)UK
- At least 17 government-set or inflation-indexed prices in the CPI will change between November and April.
- To help clients keep track of these ‘known knowns’ we will regularly update a table of estimated impacts.
- We expect the known knowns to prevent services inflation slowing between October and April.
Rob Wood (Chief UK Economist)UK
- The PMI fell to a 13-month low in November as businesses worried about taxes and trade wars.
- But take the implications for GDP growth with a pinch of salt; the PMI overreacts to political events.
- The MPC will look through the November PMI and stick to its ‘gradual rate cut’ message.
Rob Wood (Chief UK Economist)UK
Stronger population growth boosts official LFS employment estimates by 402K in Q2…
…Cutting productivity, as well as raising unit wage costs and therefore estimated inflation pressure.
Ignore the drop in November BRC retail sales as the data are distorted by the timing of Black Friday.
Rob Wood (Chief UK Economist)UK
- In one line: Late Black Friday cuts retail sales growth.
Rob Wood (Chief UK Economist)UK
