Now and then I pick out a key bit of new data that, in my opinion, is most useful to understand what is going on in the UK economy. 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.
January 6th 2017: Service sector productivity up
Finally, some evidence that the productivity paradox may be being resolved, as elusive gains in the lower-value service sector start to show up in the data. Good news for potential payrises.
December 23rd 2016: Household disposable income and confidence both down
Although consumer spending is holding up, disposable income and household perceptions of their financial situation seem to be falling back, according to data that runs up to the end of September 2016. This might mean a tightening of belts in 2017. Merry Christmas!
December 16th 2016: London not the fastest growing city economy
I must admit I was pleasantly surprised by this data, released yesterday by the ONS, that showed the economies of Edinburgh, Belfast, Newcastle, Leeds, Birmingham and Manchester, amongst others, all growing faster than London. Of course London remains many times larger, but it shows that it is possible for other cities to catch up.
December 6th 2016: M&A activity possibly dropping back?
Merger and Acquisition data is a good indicator – in the long run at least – of overall business confidence. This graph from the ONS shows how confidence was high running into the financial crisis but has since dropped back. In 2016 there is a slight suggestion that things were picking up again post-Brexit but then fell in recent months.
November 24th 2016: Debt now expected to rise to 90% of GDP
I’ve been keeping a record of UK public debt forecasts since the OBR was established in 2010. Here’s a chart that brings it all together and shows that whereas in 2010 debt was expected to peak at 70% of GDP in 2013-14, now its expected to peak at a massive 90% of GDP in 2017-18.
November 18th 2016: Consumers are feeling confident
There wasn’t much in this week’s ONS retail sales data to suggest that consumers were feeling worried. The upward path of sales volumes continues, as this week’s chart shows. Going into a little more detail however, it can be seen that although prices continue to fall in stores and online retailing, the pace of the fall is slowing. Petrol prices, meanwhile are rising. But compared to other movements in the last few years, these changes are very slight.
November 11th 2016: Trade data doesn’t (yet) show a Brexit effect
This week the ONS monthly trade figures for September 2016 came out, providing the first quarter’s data since the Brexit vote. There was no discernible difference from the previous trends, leading the ONS to say there was “little evidence in the data of the lower pound feeding through into trade volume or prices”
See here for earlier updates.