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Latest monthly UK PMI surveys were upbeat, hinting at firmer Q3 GDP. Increasing skill shortages suggest a pick-up in wage growth in coming months, supportive for cash strapped consumers.   Scarcity. Economics is, partly, the study of scarce resources. Well, UK employers are starting to get a first hand taste. Respondents to last month’s services...
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A fresh Parliamentary term but the top agenda item is most definitely familiar. Brexit will again be all-consuming in the coming months, and far beyond.   Prepared? The UK Government has published initial technical notices outlining preparations for a “no deal” Brexit which cover a wide number of areas: EU funding, nuclear research and regulation,...
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    The UK’s encouraging fiscal position provides Chancellor Hammond with more room for manoeuvre in his upcoming autumn statement. Breakthrough? The US and Mexico have agreed a bilateral trade deal but Canada has not signed up. The two sides agreed on stricter rules for Mexican exports to the US but details are sparse. This...
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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...
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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...
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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...
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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...
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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...
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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...
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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...
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