Archive

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.

March 25, 2021
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Covid-consensus is over-optimistic

  • Enthused by vaccine success in some countries, the consensus appears to be centred on a modal "return to normal" outcome in H2.
  • We see a higher probability of a more restrictive outcome, with downside risks to a more cautious mode.
  • Continued curbs on international travel create a fractured global economy, while local flare-ups will lead to periodic domestic restrictions.