UK Boris seems to be responding quite well to treatment, which is encouraging. The media debate that his temporary removal created a power vacuum and compromised decision making just misunderstands how Cabinet government works and was just a complete non-story chased by journalists fatigued by the Covid echo-chamber. Real question is how do we exit the current lockdown situation? Cabinet is discussing this today and it’s expected we’ll see the initial three week period extended through to the end of the month.
Modest improvement in the UK wages story. But it still appears that nominal gains are topping out with data flattered by the number of hours worked (at 32.2 vs. 31.8 in the same period a year ago). The stabilisation in nominal growth rates is not necessarily bad news for consumption given that inflation also looks to be moderating again, certainly at the headline level.
While the headline rate pushed up and there was a move higher in services, core inflationary pressures looked relatively stable in April. Future pressures look equally contained, in part reflected in steady PPI output prices. Sterling has been weakening but the rate of decline has, thus far, has been fairly measured
March output data was strong on the manufacturing side, amid inventory building ahead of the (since extended) end-March Brexit deadline. Construction and services ended the quarter on a weak note, leading to an overall dip in GDP in the final month of Q1.
Modest downside surprise in the consumer price numbers but really not that significant. There is little underlying price pressure now the full effects of earlier sterling depreciation have washed through. The main variance continues to come from energy/fuel prices.
Trade and output data surprising to the upside, boosted by what looks to be activity as firms seek to get ahead of the curve pending the previously expected March 29 Brexit data – which the March PMIs also showed amid a record increase in inventories (and not just compared to UK history, but globally).
UK January monthly GDP, industrial production, services output, construction & trade balance chart pack
UK January budget report chart pack
UK January labour market report & December wages chart pack
UK January retail sales chart pack
UK January inflation report chart pack
December industrial production and trade charts as well as monthly and quarterly (Q4) GDP breakdown
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