Knowledge centre

The latest YouGov poll puts the Conservative Party 33 points below Labour—the biggest Labour lead since the 1990s. The survey was published after Truss refused to dismiss the Treasury's ill-received 'mini-Budget' proposed last Friday, which would see hundreds of billions added to public debt to fund tax cuts and reforms...

Win back the crowd

29 Sep 2022

Rather than making a U-turn on proposed tax cuts, Chancellor Kwasi Kwarteng is expected to offer greater clarity on the announced measures while also offering up details of supply-side reforms...

Time to reconsider

28 Sep 2022

In a break from the norm, the International Monetary Fund has criticized the slew of unfunded and ill-aimed UK tax cuts planned for November. A spokesperson for the lender stressed that fiscal and monetary policy should be working together and that large untargeted fiscal packages would likely increase inequality...

Cable to parity?

27 Sep 2022

After dropping to a historical low of $1.0350 on Monday, bets on Cable touching parity have ramped up considerably. Chances of the pair hitting parity by the end of the year stand at over 40%...

The biggest mini-Budget in decades!

26 Sep 2022

The news couldn't get worse from an inflation perspective. Trade-weighted Sterling has depreciated 4% in the past two days (and over 14% year-to-date), which puts further pressure on import prices...

Sterling pounded

26 Sep 2022

The Pound slumped to a record low of 1.0350 after UK Chancellor Kwasi Kwarteng doubled down on tax cuts over the weekend, while also stating that there were further cuts to come.

Mini-Budget imminent

23 Sep 2022

The long-anticipated mini-Budget is due to be delivered to the nation today by UK Chancellor Kwasi Kwarteng, which will outline several tax reforms and payment caps intended to help households and businesses across Britain...

The aftermath

22 Sep 2022

After the Federal Reserve implemented its third consecutive 75 basis point rate increase last night, Chairman Jay Powell has refused to rule out a US recession as the Federal Open Market Committee hinted at intentions to keep monetary policy tighter to combat soaring inflation...

Alleviating the cost of living crisis

21 Sep 2022

UK public sector borrowing swelled to £58.2 billion in the first five months of the year. Over £30bn of tax cuts have been promised by Prime Minister Liz Truss as an aid to help alleviate the cost-of-living crisis. In this Friday’s mini-budget, Chancellor Kwasi Kwarteng will lay out the full plan in detail, with energy and tax relief measures at the forefront. Additional support measures have been met with criticism as there is a well-founded fear this could push record inflation even higher...

75 basis points for the BoE

20 Sep 2022

Traders are ramping up rate hike bets for the Bank of England ahead of its policymaker meeting this Thursday. Over 200 basis points of hikes are priced in for the next three gatherings, implying two outsized moves in the two meetings ahead. If rate hikes continue at their current pace, the policy rate could rise to as much as 4.5% in March as the central bank attempts to rein in surging prices.

Truss gets persuasive

16 Sep 2022

After the official mourning period for the UK ends next week, Prime Minister Liz Truss and Chancellor Kwasi Kwarteng are expected to push for talks with Japan's SoftBank over the possibility of listing British tech company Arm in the UK. The Japanese conglomerate has previously displayed interest in listing the Cambridge-based chip designer that it acquired in 2016 in New York only. Still, discussions between the UK government and Softbank halted during the summer after Boris Johnson left office. Executives at the bank, headquartered in Tokyo, had begun talks with UK officials about a possible dual listing which would allow the tech company to have a base in London as well as New York. Such a set-up would show a significant vote of confidence in the London stock market...

'Big Bang 2.0' first steps

15 Sep 2022

In an attempt to entice top global talent back into London offices, UK chancellor, Kwasi Kwarteng, has announced his intention to scrap the cap on bankers' bonuses...

Raising the bar

14 Sep 2022

If market reaction is anything to go by, headline US inflation numbers for August were catastrophic. Expectations for a monthly drop in consumer prices were unfounded as falling gasoline prices were heavily outstripped by increases in everything from food and shelter to medical care...

The scale of the challenge ahead

13 Sep 2022

While headlines pertaining to energy bills, food prices, and workers' strikes will disappear for the next week or so, they won't be gone forever. The new Carolean-era Britain needs to figure out which direction it wants to take to restore growth, bring down inflation, and finally tackle Brexit. We daresay the return of UK market confidence hinges on all three being solved...

Soft landing a possibility

13 Sep 2022

The UK labour market continues to tighten as the unemployment rate fell to 3.6% in the three months to July. With little excess room for employment, the extra capacity for growth is limited to an uptick in wages. This puts the Bank of England in a tough spot, staring down the barrel of a slowing economy and rising prices, an increase in wages would only exacerbate inflation further, with the headline rate far above the central bank’s 2% target...

Momentum shifts

12 Sep 2022

The UK economy expanded by 0.2% in July, slower than analyst expectations, as an extended bank holiday weekend for the Queen’s Jubilee slowed output. Another bank holiday set to take place on the 19th in honour of the late Queen Elizabeth could push the UK into a recession. However, proposed energy caps by Prime Minister Liz Truss could be enough to bring down inflation this winter, perhaps averting a much feared economic downturn...

UK mourns passing of Queen Elizabeth

09 Sep 2022

Britain’s longest-serving monarch Queen Elizabeth II passed away yesterday evening at Balmoral Castle after serving 70 years on the throne. Charles has taken on the mantle of King with a formal ceremony taking place on Saturday...

Decision day

08 Sep 2022

It’s widely expected that the European Central bank will raise headline interest rates from 0.00% to 0.75% today, even as the risk of a Eurozone recession rises. Markets will also get an insight into updated growth and inflation forecasts out of Europe, with current inflation running at 9.1%—almost five times the ECB’s target...

Weathering the storm

07 Sep 2022

In contrarian fashion, Liz Truss and her new cabinet of rightwing ministers will preside over a massive debt-funded intervention in the energy markets, which could cost the Treasury upwards of £150bn. Truss’s new Chancellor, Kwasi Kwarteng, will hold a mini-budget later this month...

Supercharged support

06 Sep 2022

The UK’s incoming PM is set to hit the ground running with a planned freeze on household energy bills. The intervention, which could cost the Treasury £130bn over the next 18 months, is a step further than the original plan to extend the existing support package from £400 to £1,000...

Shifting expectations

05 Sep 2022

Currency markets have been thrown into at least unfamiliar if not unprecedented territory as the trade-weighted US Dollar hovers around its strongest level in over two decades. Meanwhile, both Sterling and the Euro face their own headwinds, which are likely to cause significant pain points as we head towards Q4...

New face at No. 10

05 Sep 2022

As expected, European gas prices jumped at opening this morning after the news that the Nord Stream 1 would see no more gas flow from Russia to the rest of Europe for the foreseeable. Meanwhile, all eyes turn to Downing Street as the next UK PM will be announced early this afternoon...

Doubts remain

02 Sep 2022

Despite fears of a more prolonged shut down of Russia’s Nord Stream gas pipeline, it’s widely expected that operations will resume as normal this weekend. Capacity looks set to remain at 20% as European countries continue to stockpile supplies ahead of the winter months...

Truss continues with ‘pro-business’ agenda

01 Sep 2022

In her final address to Conservative voters, leadership frontrunner Liz Truss has vowed never to introduce new taxes as Prime Minister while rejecting the notion of a windfall tax on UK gas and oil companies that have enjoyed record profits this year...

Brace for impact

31 Aug 2022

UK consumers are feeling the pinch as prices on everything from petrol to crisps have accelerated at the highest rate since 2005. The current level of food inflation, which hit 9.3% in August...

Challenging road ahead

30 Aug 2022

UK inflation estimates are pointing well above 14% for January, when many expect price pressures to peak; in short, the outlook is bleak. If wholesale energy prices increase as much as expected, the scale of fiscal support needed could rise as high as £125bn through to 2024 if a deep recession is to be avoided, according to the Institute for Fiscal Studies...

Speculation against the Euro piles on

30 Aug 2022

The Euro hit 20-year lows last week as electricity and gas prices soared to all-time highs amid fears of Russia constricting energy supplies, leading the Eurozone into recession...

Ofgem announces price cap increase

26 Aug 2022

The Chief Executive of Ofgem has said that the government support scheme, which will see £400 provided to every household to mitigate rising energy costs, would no longer be sufficient as the latest forecasts predict the price cap could rise to over £6000 per year by next spring...

‘Unthinkable’ support

25 Aug 2022

This Friday, the energy regulator Ofgem will announce the new average household bill, which is set to increase to over £3,500—an 80% rise. This has prompted separate calls from both the Resolution Foundation and the British Chambers of Commerce for 'unthinkable' pandemic-style emergency support for households and businesses...

Sinking into the abyss

24 Aug 2022

Yesterday’s global Purchasing Managers’ Index data highlighted the effects of rising prices and the war in Ukraine as the world begins to tip into recessionary territory. Business activity in the US contracted for the second-straight month, falling to the weakest level since May 2020, while manufacturing activity in the UK and Europe also fell...

Blindfolded politics

23 Aug 2022

Frontrunner in the UK Conservative leadership race, Liz Truss, said she will decline economic projections from the Office for Budget Responsibility, an independent fiscal watchdog, before enacting policy to address the cost-of-living crisis...

Beware the Hole

22 Aug 2022

The US Dollar has been on an absolute tear in the past week, with market players slashing their risk-exposure heading into the annual Jackson Hole Symposium in Wyoming. The trade-weighted Greenback has risen around 2.25% since last Monday while equities have softened, and US ten-year Treasury yields climbed back towards the 3.00% handle. Still, we've got bad news for you if you're reading this in search of some respite. Factoring in the highly unstable economic and geopolitical climate, there don't seem to be very many drivers of US Dollar weakness in the near term...

Another Truss U-turn

22 Aug 2022

In a final push for votes, Conservative frontrunner Liz Truss has made yet another U-turn and pledged assistance to help businesses and households cope with astronomical energy prices this winter. This comes after stating that she didn't believe in 'giving out handouts' just a few weeks ago. The UK energy regulator,...

A new low

19 Aug 2022

British consumers were asked about their personal financial situation, and their scores reflected the lows seen in the 2008 Global Financial Crisis and the 2012 austerity period, indicating that many more people are predicting their financial situation to worsen rather than improve over the coming year. Moreover, households are equally disheartened about the general economic prospects of the UK, with the score declining every month since December 2021...

Stockpiling for winter

18 Aug 2022

Following Russia's throttling of natural gas supplies in retaliation for the western governments' support for Ukraine, traders are being forced to stockpile supplies ahead of the winter. This week, gas markets in Europe have jumped 14%, with a 6% increase yesterday to €236 per megawatt hour, representing a doubling in prices since the June highs. As gas prices sit at over ten times their normal level, Eurozone governments are exploring options of rations and subsidies for consumers; this price increase threatens to place some of the world's largest economies into a recession...

How much?!

17 Aug 2022

A rise in food prices made the largest contribution to July’s UK inflation print, which hit 10.1% from a year earlier. Today’s report, which will pile more misery on consumers, included core prices rising more than expected, while wages have rapidly fallen behind rising costs. The picture becomes increasingly murky for the Bank of England, which has forecasted a UK recession beginning in Q4 this year, lasting through to 2024. Officials have forecasted inflation to top 13% this year when the energy price-cap resets, the worst reading since September 1980 under the Thatcher government...

Read between the lines

16 Aug 2022

Further evidence that the UK economy may be weakening came with this morning’s labour data, with a reduction in new jobs created and a record fall in inflation-adjusted wages. Other measures remained tight, with the headline Unemployment Rate unchanged at 3.8% while the number of new employees rose 73k in July. Still, with the Bank of England warning that unemployment could top 6% with the cost-of-living crisis, this report will do little to ease the pressure on the UK government to help support households...