Tag Archives: UK - 10 posts found

UK: The current account deficit is growing and looking more entrenched

Much has been made of the made of Chancellor George Osborne’s success with austerity and the UK’s eruption back into growth, confounding his critics. However, ‘austerity’ has been more of a publicity exercise. Government spending as percentage of GDP has fallen only slightly, but is still higher than it ever was before the financial crisis.


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Cyclical upside intact in the UK, structural challenges remain

We have seen strong coincident activity in the UK in recent months, helped in part by a government-engineered boost to the housing market, which has lifted consumer spirits and caused retail sales to surge. Our leading indicator anticipated this upturn in the economy, and it continues to see no blots on the horizon (ie over the next 6 to 9 months), although this month it has leveled off slightly rather than continuing to climb.


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UK inflation to start rising again: linkers to outperform

UK inflation last week came back to the BoE’s target for the first time since 2009.  This should most certainly be a boon for consumers whose average real incomes have been negative for several years.  However, our UK Future Inflation…


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Inflation to hold UK recovery back

There are some notable reasons for near-term reasons for optimism in the UK. The housing market seems to be picking up, industrial production growth is looking up together with PMI data and the equity market has done well. All these are real and significant signs of a better economy in the UK, but the structural challenges remain.


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Watch the Current Account Deficit Countries

Since tapering discussions pushed up yields in the US, this has led to a steepening of yield curves across the developed world. The US has seen the greatest steepening, which argues for higher growth in the US ahead. However, the…


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UK’s current account deficit worst in G10; weaker GBP on cards

Data in the UK has been broadly positive, with much fanfare over revised GDP data showing the UK avoided the dreaded ‘double dip’.  This is a trivial distinction; the reality is the UK is still bumping along the bottom.  Manufacturing…


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UK’s Action Signals Move Closer to Fiscal Dominance

The UK Treasury’s decision to transfer coupon income from the Bank of England’s Asset Purchase Facility is a step towards ‘fiscal dominance’, where the fiscal authority ultimately gains the upper hand from the central bank and we see monetisation of public sector debts and deficits.


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Short Term Bounce in UK Industrial Production does not Negate Long Term Negative Trend

Some cheer was reported when UK industrial production rebounded a stronger than expected 2.9% MoM in July. Manufacturing output also rose a stronger than expected 3.2% MoM. The longer-term picture, however, remains bleak.


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Sterling’s rally to peter out on rising inflation

The strength of sterling has been in part due to some safe-haven flows from the Middle East (where sometimes GBP is seen as a preferable safe-haven to the USD or CHF), but this is not the fundamental driver.


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UK Inflation Set to Start Rising Again

UK inflation has been falling, driven mainly by a fall in consumer demand, and last year’s VAT increase falling out of the year-on-year comparisons. Looking under the bonnet, however, reveals a disconnect between inflation of ‘necessary’ and ‘discretionary’ goods.


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