This is a terrific podcast

The UK stock market is shrinking. Why does that matter, how do we turn things around and crucially, does Labour get it? The latest #MerrynTalksMoney podcast. bloomberg.com/news/newslette…

Really? Dont be silly Guy. Free movement is not an evangelical good or bad decision. This stuff is hard to calibrate the right approach in a world of big electorate trade offs.

I have to say this is an interesting call, seasonally adjusted MoM CPI has been higher (much higher) than the level consistent with 2% CPI for the last four months. 0.4% MoM average compared to 0.15% needed to hit CPI target.

One of the most thoughtful individuals in European eco-politics - Mario Draghi - has concluded that the EU needs to respond to US & Chinese protectionism. Global co-operation to maximise overall economic utility looks set to fracture further: euractiv.com/section/econom…

Britain is also an outlier. It's the only G7 country where inactivity is higher than before the pandemic.

And although UK inactivity hit its lowest in over 50 years before the pandemic, now it's no longer especially low by international or historic standards.

3/n

Striking how base effects from UK household energy are set to be a much greater disinflationary force in Q2 in than in comparable economies. Will drive a material undershoot in UK inflation dynamics mid-year compared to peers. This is a mirror of outsized 2023 UK inflation...

Still some UK food disinflation to come (3.9% YoY is 29-month low). Food PPI now flat, and whilst concern in pockets (El Nino) the world food price index remains down YoY. I spoke with Sean Farrington on BBC Radio 4 Today this AM speculating whether GBP weakness mutes this passthrough

UK inflation currently threading the needle between pre-pandemic price patterns, & those of 2022/23. Still inconsistent with 2% inflation target, but with two big energy base effects set to kick in during April & July. Interesting to see whether this spills over into run-rate.

Ongoing widening spread between goods inflation (0.8% YoY) & services (6.0% YoY). This is the challenge for a single narrative about inflation - rather depends on your sector exposure & whether your principle input is goods, or labour. Set to continue in Q2 with 9.8% NLW increase

UK CPI inflation at 3.2% in March - in line with our expectations. The spread between UK inflation and G20 CPI levels is down to just 0.1% - having been as high as 4.4% at its peak early last year. Likely to undershoot during Q2 as outsized base effects take hold.

Bailey also hinted that rates in the UK could come sooner than the Fed. The BOE governor was speaking at the IMF.
From Tom Rees bloomberg.com/news/articles/…

I think this kind of reporting of IMF projections - based on big uncertainty - should be avoided. The average (absolute) error from last year’s WEO to outturn is ~44bp. Basically the only thing you can conclude is that (in developed economies) there is US growth, & everyone else.

A gorgeous and hugely underrated city. #Hull #KingstonUponHull

One thing that does strike me as interesting about the Truss discourse of the OBR is that at its moment of peak omnipotence (further powers being mooted by the Shadow Chancellor) it may be entering its most dangerous phase. The argument that its view is overly influenced by those

And if you take a longer view, this matters cos for 25 years pre-pandemic we had a labour force that grew and grew, through thick and thin.
But since 2020 it's been stagnant - the biggest change reversal since the early 1990s, and a gap of over a million compared with trend.

Other data shows redundancies low too.
So this isn't an economy shedding jobs or people closer to work struggling to find it. It's being driven by people further from work not looking for work or not getting the help they need to get it.
It's the labour market holding us back.

A meaningful softening of the UK labour market starting to emerge in the latest data. Unemployment up, employment & vacancies down, whilst total pay growth has slowed to 5.6% YoY in the latest data: ons.gov.uk/employmentandl… One of the biggest challenges facing both BoE and ECB is

This is a key point in today’s pay figures. There is a lot to wash through over the next couple of months as big corporate pay awards from Q2 2023 wash out of the system & the NLW rise come in. We’ll have a clearer steer after that. Our data on pay is below its long-term ave now.

Exciting news! Join #RECLive24 for a dynamic Panel Discussion on 'The 2024 Business Context' featuring experts Simon French, Lennie Higgs, Tiger Tyagarajan & Neil Carberry. Gain valuable insights into economic forecasts & their impact on recruitment. 🎟️ bit.ly/4a263eL