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UK

UK Comment — GDP growth revised down

  1. GDP growth for Q4 2017 revised down to 0.4 percent, from 0.5 percent
  2. Private consumption growth was unchanged in Q4, but business investment much weaker
  3. GDP growth should decelerate further this year

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

UK Comment — Labour market numbers mixed

  1. Employment growth disappointed - unemployment rate up to 4.4%
  2. Timelier claims and survey measures indicate further improvement
  3. Wage growth on the strong side of expectations – base effects will pull up in the short term

Kari Due-Andresen, Chief Economist Norway | kadu01@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

UK Comment — January CPI inflation in line with the Bank of England's expectation

    CPI inflation unchanged at 3.0 percent in January, CPI core inflation up to 2.7 percent from 2.5 percent in DecemberUK CPI inflation was unchanged at 3.0 percent y-o-y in January. This was in line with the Bank of England’s expectation, but slightly higher than the consensus expectation of 2.9 percent. Core inflation increased to 2.7 percent in January from 2.5 percent in December and beat the consensus expectation of 2.

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

UK Comment — Mixed monthly data from the UK

    Industrial production down by 1.3% in December, but manufacturing up by 0.3%UK industrial production fell by 1.3 percent in December, after growing by 0.3 percent in November (revised from 0.4 percent). The consensus expectation for December was -0.9 percent. The monthly fall was the first since March 2017 and the largest fall since September 2012. However, the only downward contribution came from mining and quarrying, which decreased by 19.

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

UK Comment — A more hawkish tone from the Bank of England

  1. Policy rate unchanged at 0.5% and QE programme also unchanged. Decision was unanimous
  2. Forecast for real economy revised up
  3. MPC expects policy tightening sooner and to a greater extent

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