Archive

January 18, 2022
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UK: labour market keys open BoE doors

  • UK unemployment continued to decline after furlough ended. Activity levels are low and falling, but the 4.1% UR implies capacity as tight as when the BoE hiked to 0.5% in Nov-17. Mirroring that with a hike in Feb-22 now appears likely, barring imminent news.
  • Vacancies and wage growth have fallen back to 2019 levels, supporting the Bank rate’s potential return to 0.75% later this year. The cautious policy outlook in 2019 carried the gradual and limited mantra, contrary to current fears of aggressive tightening.

By Philip Rush


January 14, 2022
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UK: output recovery arrives less late

  • UK output growth exceeded expectations as it jumped by 0.9% m-o-m in Nov-21 to be 0.2% above its pre-covid peak. Health spending helps offset the suffering in some sectors, but most have completed their recovery, albeit with a distribution inside each.
  • Renewed covid-related disruption probably knocked GDP in Dec-21. Still the higher base now lifts our Q4 forecast by 0.3pp to 1.0% q-o-q as it slows towards Q1 growth of 0.7%. Front-loaded growth means less room to grow later, but potentially more inflation.

By Philip Rush


January 14, 2022
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FLASH: Sweden inflation in December-21

SE CPI 3.87 % (vs 3.04 %)

SE CPIF 4.14 % (vs 3.02 %)