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Macro Comment UK - Upward revision contingent on political pragmatism

Stronger-than-expected short-term momentum suggests that our GDP estimate for 2018 might be too low and our unemployment estimates for 2018-19 a little high. A more hawkish Bank of England and short-term momentum lead us to expect a rate hike in May. However, our expectation for a hike is dependent upon the assumption that the UK and the EU are able to strike a transition deal. For this to happen it would take some serious political pragmatism on both sides, but history has shown us that this often kicks in at the eleventh hour.

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Macro Comment UK - Upward revision contingent on political pragmatism

 

Kari Due-Andresen

Chief Economist Norway

Norway and UK

kadu01@handelsbanken.no

Latest analyses

2018-02-16

Macro Comment UK

2018-02-15

Morgenrapport Norge

2018-02-13

UK Comment

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Fast Comment Norway — Preview: Labour force survey and investment survey oil and gas

  1. Survey unemployment probably declined in December, to 4.0 percent
  2. Investment survey probably revised sharply upward
  3. But Norges Bank has already taken this into account

Marius Gonsholt Hov, Senior Economist | maho60@handelsbanken.no

Macro Comment UK — Upward revision contingent on political pragmatism

Stronger-than-expected short-term momentum suggests that our GDP estimate for 2018 might be too low and our unemployment estimates for 2018-19 a little high. A more hawkish Bank of England and short-term momentum lead us to expect a rate hike in May. However, our expectation for a hike is dependent upon the assumption that the UK and the EU are able to strike a transition deal. For this to happen it would take some serious political pragmatism on both sides, but history has shown us that this often kicks in at the eleventh hour.

Kari Due-Andresen, Chief Economist Norway | kadu01@handelsbanken.no

Fast Comment Sweden — Did this morning's Labour Force Survey pass you by unnoticed?

  1. Unemployment still trending down, but there is more to the outcome than meets the eye
  2. Available resources limited even before today's data
  3. Unemployment outcome a challenge to our forecast, but we await clearer evidence from indicators

Johan Löf, Senior Economist | jolo22@handelsbanken.se

Fast Comment Sweden — Preview of January inflation

  1. Not the thriller it could be: Inflation moving sideways
  2. Still, faced with a multitude of year-end effects, interpretation difficulties might emerge
  3. We struggle to find the service price weakness that the Riksbank highlighted yesterday

Johan Löf, Senior Economist | jolo22@handelsbanken.se

Fast Comment US — CPI data keep inflation jitters alive

  1. Core CPI surprised on the upside with an increase of 0.3% m-o-m; consensus: 0.2% m-o-m
  2. Keeps the possibility of more aggressive Fed tightening alive
  3. Expect USD and yields to rise and stocks to fall

Jes Asmussen, Chief Economist Denmark | jeas01@handelsbanken.dk