UK economy

Kitty Ussher is an economist and former government minister. Her dayjob is managing director of Tooley Street Research.

Each week, or thereabouts, I pick out the key bit of new data that, in my opinion, is most useful to understand what is going on in the UK at that time. Taken together, these provide a developing story about how the economy is performing and, possibly more interestingly, how we think it is performing at the time.

September 23rd 2016: Will the government’s pile of debt keep rising because of Brexit?
The massive big pile of UK government debt (which is measured as a proportion of the size of the economy) was supposed to finally start to fall for the first time since the financial crisis this year. Data for the first five months of the year – from April to August was released by the ONS this week. As shown on this slide, it looks as if things are on track. However, if the economy doesn’t grow as fast as expected in the remainder of the fiscal year, it might not look so good.

September 16th 2016: Those women, coming and taking our jobs
This chart, released as part of September’s labour market bulletin, shows the long-run trend in male and female employment rates. As can be seen there has been a noticeable convergence in the last 40 years, but still a significant gap.

September 9th 2016: A fall in sterling doesn’t necessarily boost exports.
The Office of National Statistics has today published its latest trade data, including a commentary that shows despite conventional wisdom, a fall in sterling doesn’t necessarily make exports cheaper relative to imports. Here’s the slideshowing how import and export prices are correlated.

September 1st 2016: Consumer confidence improves
The shock to consumer confidence that was recorded immediately after the EU referendum is alleviating. This chart shows how consumers felt better about the future, and their personal finances, in August than they did in July, although the aggregate consumer confidence index constructed by GfK is still in negative territory.

August 22nd 2016: A run of positive data surprises economists
This chart, courtesy of the FT and Citi, shows the difference between actual economic data and what is expected. The upwards spike shows that in the last few weeks, economists have been too pessimistic about the state of the UK economy. Data from July and the first half of August hasn’t been as bad as some people thought it would be – perhaps confidence will pick up and a recession avoided.

August 5th 2016: BoE says households will save more
The Bank of England August 2016 Inflation Report shows how it expects household saving ratios to be higher now, due to Brexit, than it thought back in May. This is the key indicator that is linked to consumer confidence and so has a direct effect on the level of demand in the economy. Here’s the chart. Will they be proved right?

July 22nd 2016: Clearest sign of falling GDP in Q3
As the graph here shows, there has historically been a strong correlation between the IHS Markit Purchasing Managers’ Index and UK quarterly GDP growth, but of course the PMI index comes out several months earlier than the GDP figures. July’s data suggests the economy is contracting – but will it persist?