May 05, 2021
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UK: saving the precautionary motive

  • There is a growing optimistic consensus that many households will treat the pandemic impact on savings as a windfall to spend. Falling annuity rates offset the effect of rising assets for retirement income, although that has partly unwound recently.
  • The post-pandemic policy toolkit presents new risks that household balance sheets need to reflect through more housing services and a higher precautionary savings buffer.

April 23, 2021
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UK: retail keeps volatility for recovery

  • UK retail sales rebounded by 5% m-o-m in Mar-21, recovering half of its decline since Oct-20 and beating consensus expectations. GDP has been less sensitive to lockdown on the downside so is set to rebound less in the recovery.
  • Businesses have been slow to re-open with only 1.6% resuming trade in the month to 18 April and a third of the accommodation and food sector still closed. Hopes are high for the next fortnight. Rejoice - UK mobility is above the most depressed half of the world.

April 20, 2021
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UK: mid-winter freeze in employment

  • The UK unemployment rate declined again to 4.9% in Feb-21 as the downwards bias from respondents during lockdowns extended. This effect remains likely to unwind after re-opening, just like it did after the initial lockdown.
  • Furlough continues to freeze the labour market in a state that is inconsistent with either prevailing output or the behavioural trends of the new normal. The tight labour is squeezing firms to raise wages and frustrating rebalancing forces by design.