Insights
Insights into the current political and economic challenges facing businesses today
A rocky road ahead for the UK labour market
Martin Beck, Chief Economist | Economic Consulting and Analysis
The latest UK labour market data signals growing concerns, with payroll employment dropping and unemployment rising. While job vacancies saw a slight uptick, the overall job market remains challenging. Looking ahead, lower inflation and interest rates may improve the outlook, but younger workers could face tougher conditions in the evolving job market.
UK GDP rebounds in November, but momentum remains fragile
Martin Beck, Chief Economist | Economic Consulting and Analysis
GDP rose by 0.3% in November, beating expectations, but underlying momentum remains weak. While fiscal tightening will weigh on growth in the near term, falling inflation, interest rate cuts and a more supportive global backdrop mean 2026 should be a better year for the economy.
The UK economy in 2026: Why the consensus is too gloomy
Martin Beck, Chief Economist | Economic Consulting and Analysis
Despite widespread pessimism, the UK economy may fare better in 2026 than expected. Falling inflation, easing interest rates, strong balance sheets and positive global conditions suggest a more supportive backdrop for growth than the current consensus implies.
UK growth is weak - but confidence, not fundamentals, is the real constraint
Martin Beck, Chief Economist | Economic Consulting and Analysis
The UK economy barely grew in the third quarter, but the underlying problem is fragile confidence rather than weak fundamentals. Strong balance sheets contrast with falling real incomes and cautious households, leaving growth subdued despite easing inflation and interest rates.
Week in Review - 19 December 2025
Martin Beck, Chief Economist | Economic Consulting and Analysis
This week brought signs that inflation is easing faster than expected and the labour market is deteriorating, helping prompt a Bank of England rate cut. Retail spending remained weak, but improving business sentiment and lower interest rates offer tentative support. With balance sheets relatively healthy, the outlook hinges more on confidence than fundamentals as fiscal policy tightens.
Inflation falls faster than expected, pointing to more aggressive monetary easing ahead
Martin Beck, Chief Economist | Economic Consulting and Analysis
UK CPI inflation fell faster than expected in November, dropping to 3.2% and all but confirming a December Bank of England rate cut. The broad-based slowdown points to inflation returning to the 2% target by mid-2026, though relief for households and businesses is likely to be gradual.
UK labour market continues to weaken, reinforcing case for rate cut
Martin Beck, Chief Economist | Economic Consulting and Analysis
UK jobs data continue to weaken, with employment falling at the fastest pace in five years and pay growth cooling sharply. The softening labour market strengthens the case for a Bank of England rate cut, as businesses remain cautious amid fragile demand and rising policy pressures.
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.