December 20, 2021
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UK Politics: Gradually and then suddenly?

  • Last week was almost certainly the worst of Boris Johnson’s premiership so far — to the point where media speculation over his possible ousting is entirely understandable even though he looks still to have time to turn things around. However, the coming weeks look set to be, if anything, even more draining of his political capital.

By Alastair Newton

December 17, 2021
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UK: bullish rotation before breakage

  • Retail sales delivered a second consecutive solid outcome as the long-awaited rotation back to higher-value offline activities occurred. Unfortunately, returning restrictions seem set to reverse this progress rapidly.
  • Rising infection rates isolate consumers who are scaling back hospitality bookings and failing to turn up, creating pain for these services businesses without the same fiscal support. Companies may be less resilient as a result this time.

By Philip Rush

December 17, 2021
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EA: inflation weighting for the descent

  • EA HICP inflation was confirmed at 4.9% y-o-y for Nov-21, while the ex-tobacco index printed at 109.49 (HTRO: 109.47). We still see this as the peak, although recent upside surprises exceed the 0.2pp decline we expect in Dec-21.
  • The profile during 2022 will depend on the new weights, where we still assume a 50% unwind of last year’s covid-distorted changes. The medium-term outlook is supported by the highest underlying inflation pressures since the Great Recession.

By Philip Rush