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The recent rise in the oil price shows that central bankers cannot rely on endlessly falling energy prices to bring inflation back to target
September 18, 2023

Central bank policymakers are once again finding themselves in a balancing act as they head into the September round of rate setting meetings, hoping to bring inflation down to the 2% target while minimising damage to the economy. Rising oil prices mean that their job has got considerably more difficult. For most of the year,

Germany needs to rethink its growth model – also for the benefit of UK plc
September 11, 2023

Following the recent data revision by the Office for National Statistics (ONS), the UK is estimated to have performed significantly stronger than initially thought in the aftermath of the Covid-19 pandemic. The ONS now estimates that the UK economy in Q4 2021 was 0.6% larger than two years earlier before the start of the pandemic.

Britain likely to witness 7,000 business insolvencies per quarter in 2024, as high interest rates cause financial strain
September 4, 2023

There were over 6,700 business insolvencies in Britain in Q2 2023, more than double what was seen in a typical quarter during the pandemic, though during that period businesses were largely protected from insolvency through a range of measures. However, even compared with a more normal period these are up by 50% compared with the

The Chinese economy – we see growing pains but not a collapse
August 28, 2023

It’s interesting that no one official in China talks about when the Chinese economy will be bigger than that of the US. Their immediate objective is that China becomes a high income economy (defined by the World Bank’s metrics) by 2025. Having been remarkably successful at reducing (on their own figures they claim to have

Immigration is estimated to yield £3.3 billion annually for public finances as the UK sees near threefold increase in non-EU immigration since 2018
August 13, 2023

The latest immigration figures for 2022 showed another steep increase in the number of people coming to the UK. Based on the latest estimates, nearly 1.2 million people immigrated in 2022 while around 557,000 left the country, leading to a net migration figure of 606,000. This is up by 118,000 compared to 2021. Looking at the

Removal of tax-free shopping costing £10.7bn in lost GDP and deterring two million tourists a year, report concludes
August 4, 2023

The analysis of VAT refund schemes for international visitors has become somewhat of a specialty at Cebr in recent years. With over a dozen reports across various jurisdictions, Cebr has been a leading voice in evaluating the costs and benefits associated with such schemes. Furthermore, we were asked to provide expert evidence in the court of

Global manufacturing sectors are in recession – expect this to worsen as the inventory cycle turns
July 31, 2023

We are expecting a major inventory cycle in worldwide manufacturing over the next two years, hitting already fragile manufacturing sectors in global economies. Even in normal times, the shape of the current economic cycle would lead to a knock-on inventory cycle, but high interest rates will amplify its shape in 2024 and 2025. This will

We forecast that China will be the world’s largest economy for only 21 years before the US overtakes again in 2057. And by 2081 India will have overtaken the US. How does this affect geopolitics?
July 24, 2023

Cebr’s last World Economic League Table (WELT) published in December 2022 suggested that China leapfrogging the US to become the world’s largest economy measured in dollar terms might be delayed to 2036 from the 2028 date previously forecast. The next version of WELT to be published this coming December will update this forecast but we

US inflation is falling back fast – will prices in the UK follow suit?
July 17, 2023

This week brought some welcome news from the US as inflation in the world’s largest economy slowed to 3% in June, down from 4% a month earlier. This is the lowest inflation reading since March 2021, and though the fall back is at least partly driven by base effects, it is hard not to see this

How a rapid post vaccine recovery, labour market tightness and shifting consumer behaviours created a perfect inflationary storm
July 7, 2023

On Wednesday, 5th July, I had the privilege of joining Professor Sir Charles Bean, (former Monetary Policy Committee and OBR Budget Responsibility Committee member), Stephen King (Senior Economic Adviser to HSBC) and Dr Sushil Wadhwani CBE (former MPC member) in giving evidence to the Treasury Select Committee. The session examined the Bank of England’s inflation

The US economy continues to confound expectations of a looming recession – so why are consumers so downbeat?
July 3, 2023

Over the past two years, the US has faced a series of challenges that have tested its resilience. Alongside the global battle against the pandemic, the nation has grappled with a surge in inflation, adding to its woes. The inflationary surge has prompted the US Federal Reserve (the Fed) to raise its base interest rates

An interest rate of 6% would mean nearly 10,000 extra home repossessions in the next three years
June 23, 2023

Please note: the figures in the report below were published before the Government announced additional measures to protected mortgage holders on 23 June. These measures will likely reduce the number of mortgage repossessions over the coming 12 months. UK mortgage holders just can’t catch a break at the moment. Gilt yields, which had been trending

The end of the free lunches…
June 19, 2023

I was recently asked to give a briefing on the UK property market for a range of foreign investors, mainly from South East Asia. This is an expanded version of some of my comments. Investing in the UK Since the Brexit vote many overseas investors have downgraded the UK. Simon French of Panmure Gordon estimates

Increase in mortgage rates expected to cost UK households £9 billion over 2023 and 2024, with London and the South East experiencing the sharpest rises
June 12, 2023

The volatility in the UK mortgage market has yet again intensified as major banks swiftly withdraw their mortgage offerings, creating more uncertainty for potential homebuyers and homeowners alike. April’s higher-than-expected inflation reading has unsettled the recent steady falls in fixed mortgage rates, highlighting affordability as the primary concern for the housing market. With the Bank

Greedflation will soon be a thing of the past as consumers’ patience wears thin
June 5, 2023

Inflation now seems firmly on the retreat across most developed economies. While concerns remain regarding the speed with which inflation is expected to fall back to target and the UK in particular seems to grapple with stubbornly high core inflation, the trend is encouraging. Still, if you were to ask two economists for the reasons

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