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United Kingdom

Macro View

Markets

Finance & Banking

Geostrategic & Long Term Issues

Key Indicators

Gross Domestic Product
chained volume measures Seasonally adjusted
(SA)
317416,315523,315845,316837,328766 328,766
CPI INDEX 00
ALL ITEMS- estimated pre-97 2005=100
(NSA)
112.9,113.5,114.2,114.4,114.6 114.6
LFS
Unemployment rate UK All Aged 16 and over %
(SA)
7.8,8,8,7.9,7.8 7.8
Loans for House Purchase
Total Value of Loans
(Millions of British Pounds, NSA)
4700,5000,6300,5700,6000 6,000
Mix adjusted house price index - UK
(2002=100, NSA)
174.35,171.4,172.8,174.4,176 176
RSI
Volume seasonally adjustedAll RetailersAll Business Index
(SA)
112.1,112.6,112.5,112.7,113.1 113.1
data by Moody's

RGE's Q3 2010 United Kingdom Outlook

RGE maintains its forecast for the UK to post 1.1% y/y real GDP growth in 2010, which we first projected in our Q1 2010 Outlook. For 2011, RGE also projects modest growth at 1.1%. The main headwinds to growth are a weak outlook for consumer spending and export demand, slack in the labor market, high debt levels, constraints to household credit and a persistently high precautionary savings rate. Additional risks include elevated headline inflation, a steady increase in inflation expectations, policy uncertainties surrounding the new Conservative-Liberal coalition and the vulnerability of sterling. Fiscal consolidation tops the new government’s agenda; the government’s plan will enhance confidence in the UK’s public finances and will reduce the pressure on its triple-A rating.

Read the Q3 2010 United Kingdom Outlook.

RGE Analysis

CROSS ASSET MONTHLY

Credit: Who Gets Their Pound of Flesh?

David Nowakowski Aug 31, 2010

CROSS ASSET MONTHLY

Commodities: No Pain, No Grain

Shelley Goldberg Aug 31, 2010

CROSS ASSET MONTHLY

Currencies: The End of Exuberance

Natalia Gurushina Aug 31, 2010

CROSS ASSET MONTHLY

Fixed Income: Unconventional Policies Create Uncertainty

Arun Motianey Aug 31, 2010

CROSS ASSET MONTHLY

Equities: Über Competitive Germany

Gina Sanchez Aug 31, 2010

CROSS ASSET MONTHLY

Executive Summary: States of Flux: Stay Risk Averse

Arnab Das Aug 31, 2010

CROSS ASSET MONTHLY

Financial Institutions: Cracks in the EZ Façade

Jennifer Kapila Aug 31, 2010

RGE STRATEGY VIEW

Struggling to Break Free: Rising Correlations Part II

By David Nowakowski and Natalia Gurushina Aug 25, 2010

RGE STRATEGY VIEW

The History of Risk—Correlations, Volatilities and Z-Scores

By David Nowakowski and Natalia Gurushina Aug 25, 2010

RGE STRATEGY VIEW

Renewable Energy: Investor Dreams and Sector Realities

By Shelley Goldberg Aug 19, 2010

Europe Weekly Spotlight: Eurozone Q2 Growth; Is Germany Rebalancing?; Polls Near in Latvia and Sweden

By Elisa Parisi-Capone, Katharina Jungen, Mary Stokes, Parul Walia, David Rogovic and Eric Persson Aug 13, 2010

RGE STRATEGY VIEW

Don’t Bet the Banks on an EZ Stress Test

By Jennifer Kapila, Elisa Parisi-Capone, Arnab Das and David Nowakowski Aug 12, 2010

Europe Weekly Spotlight: Greek Loan Review; Depressed French Consumers; UK Financial Reform

By Elisa Parisi-Capone, Katharina Jungen, Parul Walia, Rachel Ziemba, David Rogovic, Mary Stokes and Frances Donald Aug 6, 2010

RGE STRATEGY VIEW

Q3 2010 Scenario Analysis: Macroeconomic Factors & Asset Class Investment Implications

By Christian Menegatti, Rachel Ziemba, Arnab Das, Arun Motianey, Gina Sanchez, Natalia Gurushina and David Nowakowski Aug 2, 2010

RGE STRATEGY VIEW

Cross Asset Monthly: A Summer of Discontent: Navigating the Tug of War Between Greed and Fear

By Arnab Das, Natalia Gurushina, Arun Motianey, David Nowakowski, Gina Sanchez and Jennifer Kapila Jul 27, 2010

Europe Weekly Spotlight: Markets Worry About Ireland; Bulgaria Hedges Energy Bets

By Katharina Jungen, Mary Stokes, David Rogovic, Jelena Vukotic, Parul Walia and Mikko Forss Jul 23, 2010

Europe Weekly Spotlight: Germany Peaks; Slovakia Relents; UK House Price Indexes Diverge

By Katharina Jungen, Jelena Vukotic, Mary Stokes, Elisa Parisi-Capone, Mikko Forss and Parul Walia Jul 16, 2010

GLOBAL ECONOMIC OUTLOOK

United Kingdom: Q3 2010 Outlook

By Parul Walia Jul 12, 2010

Europe Weekly Spotlight: Merkel’s Worries Increase; Romania Ceases Monetary Easing

By Elisa Parisi-Capone, Katharina Jungen, Parul Walia, Jelena Vukotic and David Rogovic Jul 2, 2010

Europe Weekly Spotlight: Growth in Turkey, Austerity Beyond (even France)

By Elisa Parisi-Capone, Mary Stokes, Katharina Jungen, Mikko Forss, Parul Walia and David Rogovic Jun 25, 2010

The Costs of Oil Drilling

By Mikka Pineda and Gary Clark Jun 24, 2010

Europe Weekly Spotlight

By Mary Stokes, Elisa Parisi-Capone, Katharina Jungen, Mikko Forss, Parul Walia and Jelena Vukotic Jun 18, 2010

GLOBAL ECONOMIC OUTLOOK

United Kingdom: Q2 2010 Outlook

By Parul Walia Apr 12, 2010

GLOBAL ECONOMIC OUTLOOK

United Kingdom: Q1 2010 Outlook

By Elisa Parisi-Capone Jan 30, 2010

Comparing 2010 Growth Forecasts for Major Economies

By Rachel Ziemba, Elisa Parisi-Capone, Christian Menegatti, Arpitha Bykere, Bertrand Delgado and Mikka Pineda Jan 21, 2010

Sovereign Debt: The Developed World’s Next Big Problem?

By Arpitha Bykere, Elisa Parisi-Capone, and Katharina Jungen Jan 13, 2010

United Kingdom Economic Outlook, Q4 2009

Christopher Mooney Oct 7, 2009

UK Housing Market Shows Signs of Life

Salman Ahmed and Chris Mooney Aug 21, 2009

United Kingdom Economic Outlook, Q3 2009

Christopher Mooney Jul 24, 2009

EconoMonitors

RGE Analysts' EconoMonitor

What the UK Unemployment Numbers Don’t Tell

Parul Walia Aug 27, 2010

Global Macro EconoMonitor

Household Leverage: What Does the U.S. Have that the UK Does Not?

Rebecca Wilder Aug 23, 2010

Global Macro EconoMonitor

Household Saving Rates in the U.S., UK, and Germany: (Possibly) Light at the End of the Tunnel

Rebecca Wilder Aug 20, 2010

Global Macro EconoMonitor

Budget Cuts in Europe: Meet the “Virtuosi” and the “Laggards”

Paolo Manasse Jul 28, 2010

Global Macro EconoMonitor

Is There a Global Economic Slowdown in the Works?

Edward Hugh Jul 14, 2010

Global Macro EconoMonitor

Crib Notes for G7 Unemployment Rates

Rebecca Wilder Jul 6, 2010

Nouriel Roubini's EconoMonitor

Roubini Telegraph Interview, Tackling the UK Deficit

Nouriel Roubini May 24, 2010

Global Macro EconoMonitor

The Road to Economic Serfdom

Peter Boone and Simon Johnson May 24, 2010

RGE Analysts' EconoMonitor

A Chat with Anatole Kaletsky

Joshua Glazer May 12, 2010

Europe EconoMonitor

Europe's Web of Debt

Barry Ritholtz May 6, 2010

Europe EconoMonitor

UK: Looking Good for the First Quarter

David Smith Apr 8, 2010

US EconoMonitor

Kraft: Management Incompetence Visited On Cadbury Employees

Yves Smith Apr 5, 2010

Europe EconoMonitor

Serious Problems Emerge for the F-UK-De Group of Countries

Edward Hugh Mar 16, 2010

RGE Analysts' EconoMonitor

Choppy Waters Rock the Trans-Atlantic Relationship

Michael Moran Mar 11, 2010

Europe EconoMonitor

Greek Bailout News (1)

Edward Hugh Feb 2, 2010

Global Macro EconoMonitor

Global Consumer Confidence is Currently Less than Stellar

Rebecca Wilder Feb 2, 2010

Nouriel Roubini's EconoMonitor

The Risky Rich

Nouriel Roubini Jan 18, 2010

Europe EconoMonitor

Tax at 50% is a Good Way to Kill the Golden Goose

David Smith Jan 13, 2010

RGE Analysts' EconoMonitor

RGE's Wednesday Note - Sovereign Debt: The Developed World’s Next Big Problem?

Arpitha Bykere Jan 13, 2010

Europe EconoMonitor

A Decade to Tip the World to the East

David Smith Jan 5, 2010

Global Macro EconoMonitor

Asia Tells the West to Get Off its High Horse

Edward Harrison Jan 4, 2010

Europe EconoMonitor

A Record Breaking Year - For all the Wrong Reasons

David Smith Dec 29, 2009

Global Macro EconoMonitor

Buiter: “It’s Five Minutes to Midnight for Greece”

Edward Harrison Dec 9, 2009

Global Macro EconoMonitor

Savings Gluts and Bubbles

Mark Thoma Dec 4, 2009

Europe EconoMonitor

Two Bank Speeches and a New Job

David Smith Dec 3, 2009

Nouriel Roubini's EconoMonitor

Roubini Global Economics – Holiday Season Kick-off: North America and Europe Retail Sales

RGE Analyst Team Nov 25, 2009

US EconoMonitor

British Regulators Disclose Terms of Emergency Aid During Panic of 2008

Edward Harrison Nov 24, 2009

Europe EconoMonitor

A Mini-Split on the MPC

David Smith Nov 18, 2009

Europe EconoMonitor

Bank Moderately Upbeat - Good Unemployment News

David Smith Nov 11, 2009

Global Macro EconoMonitor

Britain To Break Up Biggest Banks

Simon Johnson Nov 3, 2009

Europe EconoMonitor

If the UK Economy is Still in Recession, why are London House Prices Hitting New Records?

Edward Harrison Oct 23, 2009

Europe EconoMonitor

King on the Banks

David Smith Oct 21, 2009

Europe EconoMonitor

Good News on Unemployment

David Smith Oct 15, 2009

Europe EconoMonitor

We're Still a Nation of Spenders, Not Squirrels

David Smith Sep 30, 2009

RGE Analysts' EconoMonitor

The July TIC Data: In for the Long Term?

Rachel Ziemba Sep 16, 2009

Europe EconoMonitor

Inflation Lowest in Nearly Five Years

David Smith Sep 16, 2009

US EconoMonitor

Is Economic Boom around the Corner?

Edward Harrison Sep 14, 2009

US EconoMonitor

What Would Friedman Say?

Rebecca Wilder Sep 14, 2009

RGE Analysts' EconoMonitor

Ripples of 9/11 Continue 8 Years On

Rachel Ziemba Sep 11, 2009

Europe EconoMonitor

Growing Again

David Smith Sep 8, 2009

RGE Analysts' EconoMonitor

RGE Monitor - Q2 Performance in Western Europe

Elisa Parisi-Capone and Chris Mooney Sep 2, 2009

Europe EconoMonitor

Second Quarter GDP Revised Up

David Smith Aug 31, 2009

Global Macro EconoMonitor

Top UK Regulator Supports Transactions Tax to Shrink Financial Sector

Jeffrey Frankel Aug 31, 2009

Europe EconoMonitor

Nationwide Starts to Look Like a Trend

David Smith Aug 27, 2009

RGE Analysts' EconoMonitor

UK Housing Market Shows Signs of Life

Salman Ahmed and Chris Mooney Aug 21, 2009

Europe EconoMonitor

The UK Private Sector Hasn't Shrunk

David Smith Aug 18, 2009

Europe EconoMonitor

Bank's Easing Clips the Wings of the Rising Pound

David Smith Aug 12, 2009

Daily Digest

Analysis

Long-Term Trends in Public Finances in the G-7 Economies

IMF  Carlo Cottarelli and Andrea Schaechter Sep 01, 2010

Analysis

UK Bank lending: The manager says no

Financial Times  Norma Cohen and Sharlene Goff Aug 30, 2010

News

Warning on public sector job cuts

FT  Aug 30, 2010

Analysis

U.K. Q2 GDP Growth Revised Up to 1.2% Q/Q

IHS Global Insight  Aug 27, 2010

News

U.K. Economy Expands More Than Expected

WSJ  Aug 27, 2010

News

UK quarterly growth revised upwards

FT  Aug 27, 2010

Analysis

UK output, income and expenditure 2nd quarter 2010

Office for National Statistics  Aug 27, 2010

Analysis

Euro public debt and the markets: sovereign fundamentals and CDS market dynamics

Barclays Capital  Laurence Boone, Søren Willemann and Laurent Reansolet July 2010

News

Fairness should never be a numbers game

FT  Nick Clegg Aug 26, 2010

Analysis

Can the UK emulate Germany’s export surge?

Lloyds TSB  Trevor Williams Aug 23, 2010

News

Pessimism remains over UK economy

FT  Aug 25, 2010

News

Mortgage and business lending falls

FT  Aug 25, 2010

News

Germany at odds with UK on bank levy

FT  Aug 24, 2010

Analysis

Healthcare competition saves lives

VoxEU  Carol Propper and Marty Gaynor Aug 23, 2010

Analysis

Europe Weekly Spotlight: UK and German Inflation; Turkish Monetary Policy; Nordic PMIs

Roubini Global Economics  RGE’s Europe Analyst Team Aug 20, 2010

Analysis

Public sector finances: July 2010

Office for National Statistics  Aug 19, 2010

Analysis

Consumer price indices July 2010

Office for National Statistics  Aug 17, 2010

Analysis

Inflation Report: August 2010

Bank of England  Aug 16, 2010

News

U.K. Tax on Bank Bonuses Assailed

WSJ  Aug 16, 2010

News

Lending to small UK companies tumbles

FT  Aug 16, 2010

Analysis

Labour market statistics August 2010

ONS  Aug 11, 2010

News

Now Britain and Iceland go to war over the mackerel

The Independent  Martin Hickman Aug 10, 2010

Blogs

Recapitalizing Cooperative and Publicly Owned European Banks: A Cautionary Tale From the U.K.

Real Time Brussels, Wall Street Journal  Stephen Fidler Aug 10, 2010

Research

The Evolution and Functioning of the Traded Gas Market in Britain

Oxford Institute for Energy Studies  Patrick Heather August 2010

News

Coming up for air

The Economist  Aug 09, 2010

Analysis

Index of Production June 2010

Office for National Statistics  Aug 06, 2010

News

RBS reports first-half profit of £9m

FT  Aug 06, 2010

News

UK: Industrial production up by 1% in Q2

BNP Paribas  Aug 06, 2010

Blogs

Optimistic Assumptions Underpin UK Fiscal Projections

Research Recap / EIU  Aug 05, 2010

News

MPC opts to leave policy unchanged

FT  Aug 05, 2010

News

UK car sales tumble 13% in July

FT  Aug 05, 2010

Analysis

Lloyds 2010 Interim Results

Lloyds Banking Group  Aug 04, 2010

News

Sterling's Good Run

WSJ  Aug 04, 2010

Analysis

Northern Rock plc: Group Half Year Results 2010

Northern Rock  Aug 03, 2010

News

HSBC

FT via Lex  Aug 03, 2010

News

Focus on cuts divides Conservatives

FT  Aug 03, 2010

News

HSBC and BNP lead European rebound

FT  Aug 03, 2010

News

Hopes for UK economy energise sterling

Financial Times  Jack Farchy Aug 02, 2010

Analysis

HSBC Interim Report 2010

HSBC  Aug 02, 2010

News

HSBC profit hits $11.1bn as bad debts fall

Financial Times  Sharlene Goff Aug 02, 2010

Analysis

United Kingdom: CIPS index edged down to 57.3 in July

BNP Paribas  Raymond Van der Putten Aug 02, 2010

Research

8. Liquidity Risk, Credit Risk and the Overnight Interest Rate Spread: A Stochastic Volatility Modelling Approach

DIW Berlin  Guglielmo Maria Caporale, John Beirne and Nicola Spagnolo Jul 31, 2010

News

BP knocks back Sinopec bid

Upstream  Jul 30, 2010

Blogs

UK energy scenarios: working with a flawed model

FT Energy Source  Akanksha Awal Jul 28, 2010

News

King endorses regulatory shake-up

FT  Jul 28, 2010

Opinions

Man who would be king of what? Dudley takes over at BP

The National  Tamsin Carlisle Jul 26, 2010

Research

Investing for an Uncertain Future: Priorities for UK Energy and Climate Security

Chatham House  John Mitchell and Nick Mabey July 2010

Analysis

Meet The New Boss: BP Managing Director Robert Dudley to replace Tony Hayward

Center for American Progress  Faiz Shakir, Amanda Terkel, Matt Corley, Benjamin Armbruster, Zaid Jilani, Alex Seitz-Wald and Tanya Somanader Jul 27, 2010

News

UK growth fastest for four years

FT  Jul 23, 2010

News

UK economic growth jumps to 1.1%

BBC  Jul 23, 2010

Blogs

Back to the future with UK GDP (updated)

FT Alphaville  Jul 23, 2010

Analysis

Gross domestic product preliminary estimate 2nd Quarter 2010

Office for National Statistics  Jul 23, 2010

Analysis

U.K. Q2 GDP Growth Almost Triples to 1.1% Q/Q

Global Insight  Jul 23, 2010

Opinions

North Sea Oil’s New Boom

Energy Tribune  Peter C Glover Jul 22, 2010

News

Lloyd's adds its voice to dire 'peak oil' warnings

The Guardian  Terry Macalister Jul 22, 2010

News

British banks face £390bn 'funding gap'

Telegraph  Harry Wilson Jul 21, 2010

Analysis

How big a risk is UK inflation?

Lloyds TSB  Adam Chester Jul 19, 2010

Analysis

UK: Public sector finances-June 2010

Office for National Statistics  Jul 20, 2010

Analysis

About that Oil Spill … Welcome to Washington, Mr. Cameron

Center for Strategic and International Studies  Heather A. Conley and Rick "Ozzie" Nelson Jul 20, 2010

Analysis

United Kingdom: Q3 2010 Outlook

Roubini Global Economics  Parul Walia Jul 19, 2010

Analysis

Economic and Market Monitor July/August 2010

Commerzbank  Jul 19, 2010

Analysis

Global Markets July 14, 2010

TD Bank Securities  Andrew Spence et al Jul 15, 2010

News

Pimco makes U-turn on UK bonds

FT  Jul 15, 2010

News

EU Clears BA's Alliance With American, Iberia

Wall Street Journal  Alessandro Torello, Carolyn Henson and David Tidmarsh Jul 14, 2010

Analysis

Labour market statistics: July 2010

Office for National Statistics  Jul 14, 2010

Research

British Attitudes Towards the UK’s International Priorities

Chatham House  Robin Niblett and Peter Kellner July 2010

Opinions

Fiscal Fibs and Follies

Project Syndicate  Barry Eichengreen Jul 13, 2010