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 29, 2021

HEM: afterglow illusion

The recovery from re-opening will not undo the damage done.

Key views:  

1) Lockdowns will leave a painful legacy, with brisk mechanical rebounds falling far short of full recovery.

2) Fear of vaccine-resistant strains mean activity restrictions remain part of the policy toolkit

3) Monetary policy lacks the power to stimulate activity independently of fiscal policy

4) De-globalisation continues with the populist pursuit of supply chain independence

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.