Archive

January 22, 2026
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UK: Only A Little Less Fiscally Bleak

  • The UK public finances ended 2025 bullishly with cash receipts jumping ahead of forecasts, sending an encouraging signal ahead of January’s critical tax deadline.
  • Tracking a slightly better performance in 2025-26 is unlikely to create a post-pandemic low in borrowing after years of imprudence that relied on restraint rolling ever later.
  • Borrowing should be £30-40bn above the initial forecast for this year, made during the depths of covid doom. Fiscal slippage remains the real rule investors should remember.

By Philip Rush

January 20, 2026
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UK: LFS Fades Extremes

  • Some of the support offered to both hawkish and dovish narratives faded in the latest labour market data, but this won’t break the case for any camp on the MPC.
  • The unemployment rate held steady for the first time since July. Employment isn’t keeping up with the surging labour force, including students not finding flexible work.
  • Redundancies retraced lower, and wage growth has slowed, but the fall in private pay is probably exaggerated by reclassification to the public sector. We still see no more cuts.

By Philip Rush

January 15, 2026
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UK: Turning the Statistical Corner

  • The UK GDP surprise flipped to exceed expectations with 0.3% m-o-m growth in Nov-25 as residual seasonality turned past its trough. We now track 0.14% q-o-q for Q4.
  • Further upside news is likely over the next few months as output surges again in Q1, pushing back dovish hopes for another rate cut. We still see the cutting cycle as over.
  • Economists prefer to tell fundamental stories, ignoring statistical ones, but we should not be shocked by the impact of the predictable surprises created by this shortcoming.

By Philip Rush

December 16, 2025
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UK: LFS Strengthens Policy Division

  • Doves and hawks on the MPC will find support for their views in the UK labour market data. It should strengthen divergent views in December, not resolve disagreement.
  • Another rise in the unemployment rate and a shocking spike in redundancies can feed dovish fears that activity in the labour market is breaking into disinflationary weakness.
  • Hawks can see another round of upwards revisions to wages, driving surprise persistence again. Total pay’s trend is stable in recent years, and regular pay is sticking too high.

By Philip Rush

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