Insights
Insights into the current political and economic challenges facing businesses today
UK GDP slips again, leaving a December rate cut nailed on
Martin Beck, Chief Economist| Economic Consulting and Analysis
UK GDP fell for a second consecutive month in October, leaving the economy with little momentum heading into the final quarter of the year. Weakness has spread beyond manufacturing into services and construction, leaving the economy flirting with recession and an interest rate cut by the Bank of England next week odds on.
Week in Review - 28 November 2025
Martin Beck, Chief Economist | Economic Consulting and Analysis
This week’s Budget delivered a smaller-than-expected fiscal “black hole” and nearly £22bn of headroom. Borrowing rises in the near term, the tax burden heads to record highs, and the OBR expects sluggish growth with no material boost from Budget measures. Without deeper structural reform, the UK risks higher taxes, excessive public spending, and weak growth for the rest of the decade.
Budget 2025 - Fiscal headroom rises, but the UK’s growth problem remains untouched
Martin Beck, Chief Economist | Vincenzo Rampulla, Director
Rachel Reeves’ second Budget doubles the government’s fiscal headroom with a more modest tightening of fiscal policy than expected, but relies heavily on a patchwork of delayed tax rises. The public finances look more stable in the near term, yet the Budget offers little to boost long-term growth, improve public sector productivity or deal with the structural drivers of high UK energy prices.
Week in Review - 21 November 2025
Martin Beck, Chief Economist | Economic Consulting and Analysis
This week saw inflation ease and rate cuts on the horizon, but government borrowing overshoot and more signs the Budget is likely to rely on a multitude of tax rises rather than major reforms. Retail spending fell in October, but there were temporary factors at play. The Chancellor faces a delicate balance between supporting the economy and restoring fiscal discipline.
WPI Budget Preview: Higher taxes, rising risks, and what to watch
Martin Beck, Chief Economist | Vincenzo Rampulla, Director
Martin Beck and Vincenzo Rampulla break down the political and economic stakes of Rachel Reeves’s 26 November Budget - widely seen as a pivotal moment that could reset the government’s strategy and reshape the economic landscape.
Inflation slows, setting the stage for a December rate cut
Martin Beck, Chief Economist | Economic Consulting and Analysis
UK inflation slowed in October for the first time since May, as energy and core price pressures cooled. With growth weakening and the upcoming Budget set to tighten fiscal policy, conditions are in place for a Bank of England interest rate cut in December - offering relief on borrowing costs and supporting consumer confidence. We expect two or three further rate reductions in 2026.
UK Week in Review - 14 November 2025
Martin Beck, Chief Economist | Economic Consulting and Analysis
A week of more Budget leaks and political turbulence came as the UK economy softened, with unemployment rising and GDP near-stagnating. With confidence weak despite strong balance sheets, the Chancellor’s choices on tax and a credible pro-growth agenda will be crucial to avoiding continued underperformance.
UK growth falters leaving the Chancellor even more exposed
Martin Beck, Chief Economist | Economic Consulting and Analysis
UK GDP slipped 0.1% in September, leaving Q3 growth almost flat. While the near-term outlook has softened, and a December rate cut now looks even more likely, easing inflation, healthier balance sheets and looser monetary policy could support a better 2026. But without a confidence-boosting, pro-growth Budget, the UK risks another year of underperformance.
UK labour market weakens as Budget uncertainty bites
Martin Beck, Chief Economist | Economic Consulting and Analysis
The UK labour market appears to be losing momentum. Employment fell, unemployment rose, and pay growth slowed in the latest data - signs that Budget uncertainty may be hurting the real economy.
UK Week in Review - 7 November 2025
Martin Beck, Chief Economist | Economic Consulting and Analysis
This week’s developments point to a major fiscal-monetary crossover. Rachel Reeves’ pre-Budget speech set expectations for broad-based tax rises to rebuild fiscal headroom, while a narrow Bank of England vote signalled growing support for rate cuts. With disinflation gaining pace and modest growth continuing, a December rate reduction now looks all but certain.
BoE holds fire - But a December rate cut now looks imminent
Martin Beck, Chief Economist | Economic Consulting and Analysis
A narrow 5-4 vote to hold rates in November’s MPC meeting shows how close the Bank of England is to easing. With fiscal tightening looming and inflation fading faster than expected, we think a December rate cut is now odds-on.
The BoE will probably skip a rate cut this week, but a December move is odds on
Martin Beck, Chief Economist | Economic Consulting and Analysis
We expect the Bank of England to hold interest rates narrowly when it announces its decision on Thursday 6 November, preferring to wait for greater clarity from the Budget later this month. But with inflation undershooting forecasts and fiscal tightening ahead, a precautionary rate cut in December is highly likely.
UK Week in Review - 31st October
Martin Beck, Chief Economist | Economic Consulting and Analysis
The UK economy - and housing market in particular - continue to defy the downbeat consensus, but that strength offers little protection from looming tax rises. With the OBR’s forecasts now on her desk, we think the Chancellor will raise income tax to plug a sizeable fiscal gap. The Budget may impose a deadweight on the economy, but it could also pave the way for earlier rate cuts if the Bank of England moves to offset the drag.
UK housing market revival resumes as mortgage costs ease
Martin Beck, Chief Economist | Economic Consulting and Analysis
UK mortgage approvals rose to their highest in nine months in September and mortgage lending jumped, signalling renewed momentum in the housing market despite Budget uncertainty. Falling mortgage rates and looser credit conditions are helping to stabilise activity, though looming fiscal risks suggest the recovery remains fragile.
UK Week in Review - 24th October
Martin Beck, Chief Economist | Economic Consulting and Analysis
UK economic data offered some welcome relief this week. Inflation looks to have peaked at a lower level than expected, borrowing costs have eased, and consumer spending remains resilient. But with fiscal headroom still tight, the Chancellor faces a difficult Budget balancing act next month.
Plaid Cymru win Caerphilly, leaving questions for Labour
Solomon Fitzpatrick, Senior Consultant | Public Affairs and Corporate Communications
Plaid Cymru have won the Caerphilly by-election, despite Reform having led the polls in the lead up. The result marks the first time Labour have lost the seat in either the Senedd or Westminster, having held the Westminster seat for more than a century. Solomon Fitzpatrick provides insight on what this means for the current Labour government, and next May’s Senedd elections.
UK retail sales maintain momentum, but recovery still fragile
Martin Beck, Chief Economist | Economic Consulting and Analysis
UK retail sales continued to recover in September, extending a four-month run of growth. But while the data point to a recovering consumer sector, the broader picture remains one of slow progress. Volumes are still below pre-pandemic levels, and a shift in household spending towards services and experiences continues to limit the scope for a full retail revival.
Is UK inflation past its worst?
Martin Beck, Chief Economist | Economic Consulting and Analysis
On the face of it, CPI inflation at 3.8% in September suggests the UK’s inflation problem persists. But the latest reading came in below consensus and Bank of England expectations, while some measures of underlying price pressures eased. A combination of base effects, lower oil and petrol prices and the drag from tighter fiscal policy mean inflation should now start to head down.
Little relief for the Chancellor as borrowing remains stubbornly high
Martin Beck, Chief Economist | Economic Consulting and Analysis
September’s government borrowing figures were in line with the OBR’s forecast and the deficit in the year to date was revised down, but the good news may stop there. The government’s headroom against its fiscal rules has almost certainly disappeared, leaving tough tax and spending choices ahead in November’s Budget.
Week in Review: Signs of stability amid fiscal clouds
Martin Beck, Chief Economist | Economic Consulting and Analysis
This week saw signs of stabilisation emerging as jobs and GDP edged up and pay growth slowed, pointing to an easing in inflationary pressures. But with tax rises looming in the budget, confidence remains fragile and the sustainability of the expansion uncertain.