Tag: United Kingdom

The Bank of England’s next monetary policy move is now wide open, following a significant downside surprise in the August inflation print out earlier on Wednesday.

British retail sales fell in August at the fastest rate since March 2021 and most stores are expecting another tough month ahead, an industry survey showed on Thursday.

UK wages grew much more than expected and at a record annual pace in the three months to June, according to official figures that are likely to reinforce the Bank of England’s concerns over the pressures fuelling inflation. 

The U.K. economy defied expectations of stagnation, expanding by 0.2% in the second quarter.

The Bank of England has increased interest rates by 0.25% to 5.25%, its 14th consecutive hike, as it aims to combat high inflation.

Economists polled by Reuters had projected an annual rise in the headline consumer price index of 8.2%, following the hotter-than-expected 8.7% reading of May.

The UK economy contracted by 0.1 per cent in May, less than expected, but economists warned that recent interest rate rises would hit growth in the second half of the year.

Property prices slumped 2.6% in the year to June, their biggest decline since June 2011, according to mortgage lender Halifax’s latest price index released Friday.

JPMorgan said it expects U.K. interest rates to peak at 5.75% by November, but cautions that they could go higher “under some scenarios,” hitting as much as 7%.

Britain’s economy made a lacklustre start to 2023 as inflation ate into households’ disposable income, official figures showed on Friday, and economists see a risk of recession ahead as higher interest rates keep up the pain even as inflation eases.

British retail sales fell again in June as household finances were squeezed by the rising cost of living but stores expected sales volumes to stabilise next month, a survey showed on Monday.

British retail sales unexpectedly rose in May, boosted by an extra bank holiday to mark the coronation of King Charles but also suggesting most consumers were coping with high inflation’s squeeze on their spending power.

U.K. inflation came in hotter than expected in May, as consumer prices rose by an annual 8.7%, unchanged from the previous month.

The U.K. public sector net debt in May exceeded 100% of the nation’s GDP for the first time since 1961, the Office for National Statistics said Wednesday.

Decades of underinvestment by the government and businesses have left Britain’s economy in a growth “doom loop,” according to the U.K.’s Institute for Public Policy Research.

Retailers and the film industry helped Britain’s economy inch higher in April, despite contractions in manufacturing and construction, according to data on Wednesday that pointed to slow growth rather than recession.

British retail sales declined this month after a modest rise in April but stores expect sales volumes to stabilise in June as consumer confidence improves and energy prices fall, a survey showed on Thursday.

U.S. bank Citi said on Wednesday it now expected two further Bank of England interest rate hikes, rather than the one it had previously forecast, and no rate cut in November after inflation data came in higher than expected.

U.K. inflation dropped sharply in April, as energy prices retreated and the impact of Russia’s invasion of Ukraine began to drop out of the annual consumer price comparison.

The International Monetary Fund said Tuesday that it expects the U.K. to avoid entering a recession and “maintain positive growth” in 2023.