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Lunchtime Seminar 07/09/2018 Outlook for the UK Economy

Lunchtime Seminar 07/09/2018 Outlook for the UK Economy Rosie Smith – East Midlands Agent for the Bank of England Special thanks to today’s sponsors:. The UK economy – Uncertainty high Talk to Insurance Institute of Leicester. Rosie Smith, Bank of England 7 September 2018.

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Lunchtime Seminar 07/09/2018 Outlook for the UK Economy

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  1. Lunchtime Seminar 07/09/2018 Outlook for the UK Economy Rosie Smith – East Midlands Agent for the Bank of England Special thanks to today’s sponsors:

  2. The UK economy – Uncertainty high Talk to Insurance Institute of Leicester Rosie Smith, Bank of England 7 September 2018

  3. Inflation is above our target The squeeze on pay is easing Growth is around its speed limit Interest rate rises should be gradual & limited

  4. Inflation is above our target

  5. Inflation is expected to fall during 2018 H2 as the contribution from fuels diminishes Sources: Bloomberg Finance L.P., Department for Business, Energy and Industrial Strategy, ONS and Bank calculations.

  6. The squeeze on pay is easing

  7. The MPC thinks that pay will continue to rise faster than prices in the next few years

  8. Wage growth has picked up in the private and public sectors over the past year

  9. Recruitment & retention difficulties have pushed up pay

  10. Growth is around its speed limit

  11. GDP growth is expected to have picked up in Q2 following temporary weakness in Q1 Sources: ONS and Bank calculations.

  12. Retail sales growth rose sharply in Q2 Sources: Bank of England, British Retail Consortium (BRC), CBI, ONS, Visa and Bank calculations.

  13. Manufacturing output has weakened in 2018 Sources: Bank of England, BCC, CBI, EEF, IHS Markit, ONS and Bank calculations.

  14. UK export growth appears to have slowed in Q2 although survey indicators remain robust Sources: Bank of England, BCC, CBI, EEF, IHS Markit, ONS and Bank calculations.

  15. Productivity has hardly grown since the financial crisis

  16. Unemployment is very low

  17. Interest rate rises should be gradual & limited

  18. Conditioning path for Bank Rate implied by forward market interest rates

  19. The proportion of households with high mortgage debt relative to income is lower than during the crisis Sources: British Household Panel Survey (BHPS), Living Costs and Food (LCF) Survey, NMG Consulting survey, Understanding Society Survey (USS) and Bank calculations.

  20. GDP projection based on market interest rate expectations, other policy measures as announced

  21. Unemployment projection based on market interest rate expectations, other policy measures as announced

  22. CPI inflation projection based on market interest rate expectations, other policy measures as announced

  23. Inflation is above our target The squeeze on pay is easing QUESTIONS & COMMENTS PLEASE Growth is around its speed limit Interest rate rises should be gradual & limited

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