April 13, 2021
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UK: trade rebounds better than GDP

  • UK GDP limped up by 0.4% m-o-m in Feb-21, with services growing at half that rate in the ongoing lockdown. Few businesses have reopened even by 4 April, so March is also likely to remain fairly flat. January’s smaller fall slightly shrinks our Q1 dip call to 1.9%.
  • External trade data were more depressed in January and have recovered more swiftly, especially in exports to the EU. The underlying deficit still deteriorated on non-EU weakness, although these data may remain distorted by post-Brexit reporting changes.

March 31, 2021
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UK: corporate debt growing pains

  • Despite the deepest economic downturn in three centuries, the total number of company insolvencies has fallen to its lowest annual level since 1989.
  • Support like furlough has kept the wolf from the door, but many companies now lack the balance sheet capacity to thrive, having levered up just to survive.

March 26, 2021
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UK: consumers stop feeling special

  • UK retail sales rebounded by 2.1% m-o-m in Feb-21, as expected, leaving the level about 10% below the Oct-20 peak. GDP has been less sensitive to lockdown this time so won’t bounce by as much, although a 25% recovery of Jan-21’s fall would be good news.
  • Consumers have been shielded from the economic pain of lockdown but in March they stopped assuming that outperformance would extend through the year ahead. Mobility has improved recently but the UK remains among the most depressed in the world.