September 17, 2021
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UK: on holiday from retail

  • Retail sales delivered another substantial disappointment by declining for the fourth consecutive month in August. Declines remained broad-based rather than reflecting a normalisation towards services, and restaurant bookings are falling in September.
  • Post-holiday quarantine has overtaken the “pingdemic”, with more adults than ever forced into isolation (nearly a million). Further disruption is likely to return with the schools. Consumers remain gloomy about their situation and are not splurging savings.

September 14, 2021
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UK: employers await workers in Q4

  • The unemployment rate declined again to 4.6% in Jul-21, matching expectations but diverging from the rising rate reported by repeat survey respondents. October remains the real test for the labour market as furlough and self-employment grants end.
  • Ludicrously lucrative government grants have been capping the self-employed at 70% of effort, depriving some desperately constrained sectors of up to 11% of hours. Narrow and temporary issues are not raising overall pay trends, so wage growth will collapse.

September 10, 2021
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UK: RIP rapid recovery

  • The UK’s rapid recovery phase ended in July with GDP only limping up by 0.1% m-o-m, despite output still languishing 2.4% below the pre-covid level. Only the most depressed sectors even expanded, with most of the economy slipping further from their peaks.
  • It is hard to find an optimistic angle, but seasonal factors may have distorted the recovery profile. We now track Q3 GDP growth at 1.4%, which is below our already gloomy forecast for H2 before any covid-related restrictions return.