August 12, 2022
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UK: Holidays Reduce Output in Jun-22

  • UK GDP contracted by 0.6% m-o-m in June after a downwardly revised 0.4% growth in May, which appears to confirm the distortions from the Diamond Jubilee holidays.
  • Some positive payback should occur in July as the output level normalises with the number of working days. However, GDP looks to be trending barely better than flat.
  • Aggressively increased interest rates will compound inflation’s squeeze on the cycle, raising the risk of a needless recession when pressures are burning out anyway.

By Philip Rush

July 22, 2022
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UK: Sales Down, Down, Deeper and Down

  • The British consumer continued suffering from painfully high inflation in June, with no significant real growth since Oct-21 creating an annual decline near 6%.
  • Food sales were relatively high in June but should probably be read relative to the deep drop in May amid bank holiday changes. April’s similar rise was revised away.
  • Non-retail consumption is also being squeezed. New car sales are trending down at near a 20% annual pace. Consumers are being forced to drop discretionary purchases.

By Philip Rush

July 22, 2022
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Surveys Screeching Toward Recession

  • Global manufacturing is trending towards contractions, with the Euro area now leading the way for the worse. At least price pressures are easing in the process.
  • Services are also being increasingly smashed, proportional to accelerated policy tightening, with the US indicated as contracting, and the EA on the cusp of joining it.
  • Survey-based measures of activity don’t always move with the hard data. However, broad trend shifts tend to be shared signals rather than noise, so they need respect.

By Philip Rush