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Oh boy. It’s too politically hard to tighten now so best to create months of uncertainty and end up delaying yet more tightening to an election year that already has a lot of tightening… sure thing. www.ft.com/content/9df5... Healey set to delay difficult choices with ‘breathing space’ UK Budget

ft.com

Healey set to delay difficult choices with ‘breathing space’ UK Budget

Chancellor expected to focus statement on targeted help for households and businesses rather than tax rises on the scale of recent budgets

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Rob Wood @robwoodecon.bsky.social · 29/09/2026

UK inflation expectations are not anchored Your regular reminder, from YouGov/Citi's September household inflation expectations survey published this morning, that UK inflation expectations are not anchored.

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Rob Wood @robwoodecon.bsky.social · 25/09/2026

Younger people have definitely bought into the Burnham bounce. For under-50s, and especially the under-30s, confidence is booming. Sadly, the rubber soon hits the road, with the upcoming Budget hiking taxes rather than spraying money around.

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Rob Wood @robwoodecon.bsky.social · 24/09/2026

Andy Burnham: "It's not the case we were surprised when we came in... Because of the situation in the Middle East, the position... changed over the time I've been in" Nonsense. Headroom had fallen to £15.1B on July 20, and slipped to £12.7B on Sept 22. Most of deterioration was already there.

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Rob Wood @robwoodecon.bsky.social · 24/09/2026

"...maintaining March's buffer is unnecessary at a time when borrowing and energy costs have risen sharply." Bonkers. We could very easily be back two weeks after the Budget with the new headroom gone. How would that demonstrate credibility of future consolidation? www.ft.com/content/5dec...

ft.com

Treasury open to smaller fiscal headroom to reduce UK tax hikes

Investors signal Budget buffer could fall from the £23.6bn forecast to around £14bn without spooking gilt market

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Rob Wood @robwoodecon.bsky.social · 19/05/2026

Let's just say that UK payrolls for April published today are quite unlikely to be giving an accurate steer on April job growth.

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JamesSmithRF @jamessmithrf.bsky.social · 23/01/2026

In his response @robwoodecon.bsky.social emphasises the importance of the risks from US tariffs, pressure on the Fed and how all this will play out for UK fiscal policy.

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JamesSmithRF @jamessmithrf.bsky.social · 23/01/2026

Discussion has focused on risks to UK monetary policy. @robwoodecon.bsky.social makes the point that any windfall from lower US rates spilling over to larger UK fiscal headroom is likely to spent given the unpopularity of the government.

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Resolution Foundation @resolutionfoundation.org · 23/01/2026

At our event earlier today, @robwoodecon.bsky.social discussed how political pressures meant that any fiscal windfall from lower US policy rates would likely lead to more spending by the Chancellor.

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Rob Wood @robwoodecon.bsky.social · 12/09/2025

UK inflation expectations are modestly deanchored. 5-year ahead expectations higher than when inflation was in double digits and the survey is biased vs. history down by a method change in 2020. Paging MPC.

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Rob Wood @robwoodecon.bsky.social · 28/07/2025

You've got to the love the UK CBI retailing survey. Volatile much? But for what it's worth, sales for the time of the year reach the strongest in 14 months in July.

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Rob Wood @robwoodecon.bsky.social · 28/07/2025

UK payrolls driven by NICS rather than weak demand. Sectors with high share of part-time workers—whose employment costs rise most after NICS hike—and self-employment—opportunity to cut tax liability by switching from employee status—see payrolls most. Latter means payrolls exaggerates job falls.

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Rob Wood @robwoodecon.bsky.social · 25/07/2025

UK political views increasingly seem to be driving responses to consumer sentiment—a phenomenon seen for some surveys in the US too—making them a less reliable leading indicator.

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Rob Wood @robwoodecon.bsky.social · 17/07/2025

Which do you believe? Payrolls that just got massively revised, or the other two series which are also revision prone and in the case of the LFS not firing on all cylinders yet. Jobs falling or rising solidly?....What the MPC would give for accurate data.

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Rob Wood @robwoodecon.bsky.social · 17/07/2025

Surprise, surprise, UK payrolls were revised up bang in line with their typical pattern. The question is, why would anyone believe the dodgy first estimates from this series showing tanking jobs? With a typical revision to June data, job falls are easing now.

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Rob Wood @robwoodecon.bsky.social · 07/07/2025

Shall we call it the estate agents' PMI?

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Rob Wood @robwoodecon.bsky.social · 04/06/2025

Here's the thing about the UK PMI. The higher uncertainty goes the worse an indicator of growth the PMI becomes. Policy uncertainty was nearly 5 standard deviations above normal in April/May, so the PMI is giving a far too pessimistic steer.

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Rob Wood @robwoodecon.bsky.social · 02/06/2025

Cautious consumers you say? Retail sales growing the fastest in 3 years and now liquid asset accumulation dropping sharply. For my money the ONS saving rate data are wrong—they often revise it down sharply. Consumers will keep GDP growth ticking along.

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Rob Wood @robwoodecon.bsky.social · 21/05/2025

The MPC will struggle to cut twice more this year after inflation surged to 3.5%, well above consensus of 3.3% but close to our call of 3.6%. Administered prices drove the surge, and there was a small Easter boost, but underlying pressures are stubborn. 'Skips' are likely now.

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Alpesh Paleja @alpeshpaleja.bsky.social · 28/03/2025

It's difficult to reconcile the data around the cautious consumer - not least another pick up in the savings ratio - with the strength in the retail sales. There are probably good reasons to put more weight on either set of data, but the discrepancy does muddy the true picture of consumer activity

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Rob Wood @robwoodecon.bsky.social · 28/03/2025

Are more bad data leading us to misdiagnose the UK economy. Put another way can we really trust that the UK cash saving rate rose to an all-time high in Q4 2024 as the ONS reported this morning? The chart is startling, with households saving 12.0% of their income in Q4 (1/n)

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Rob Wood @robwoodecon.bsky.social · 28/03/2025

Retail sales continue their rebound after the Budget knocked confidence for a couple of months. Retail sales volumes have been trending up pretty solidly since late 2023 and 3m year-over-year growth reached the highest since March 2022. GDP growth will rebound in Q1.

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Rob Wood @robwoodecon.bsky.social · 26/03/2025

Meanwhile, in other news that may have gone under the radar today. Uh-oh. Household 5-10 year ahead inflation expectations rise to the highest since October 2022, when actual inflation was 11.1%. Anchored these are not. Paging Andrew Bailey.....

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Rob Wood @robwoodecon.bsky.social · 26/03/2025

Fiscal statements are quite something to watch. The Chancellor talked a good game, but ultimately Ms. Reeves plans to borrow more in every year of the OBR's forecasts and raised spending in the near-term. Make me virtuous, but not yet (1/n)

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Rob Wood @robwoodecon.bsky.social · 24/03/2025

Ah, PMI day. Always fun. Job cuts apparently moved from as bad as the month after Lehman's bankruptcy, to merely as bad as last October—when payrolls rose. We all know the problems: qualitative survey; responses can reflect sentiment. Treat with plenty of salt.

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Jon Reades @jreades.bsky.social · 21/03/2025

Have been part of one of the longitudinal HH surveys. Every time I fill in the same pages and pages of info for everyone in the household. The survey has no ‘memory’ in terms of showing me previous answers to check. All from scratch in each wave. If I didn’t care I’d have given up.

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Caterpillar ist satt @siberianpine.bsky.social · 21/03/2025

Guardian December 2024 talks about internal problems: unrealistic targets and management/exec unwilling to listen to expert advice; low pay, constantly being told to find more savings, and poor morale; difficulty getting people to engage with survey staff.

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Rob Wood @robwoodecon.bsky.social · 21/03/2025

The latest disaster at the ONS. I wonder if they'll cease all data publication before too long. In all seriousness, if labour market, trade and PPI data can't be trusted, there must be questions about what other errors and problems are lurking that we haven't found out yet.

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Rob Wood @robwoodecon.bsky.social · 20/03/2025

Contrast BoE MPC minutes. Dec. 2024 "Monetary policy **was acting** to ensure that longer-term inflation expectations were anchored at the 2% target." Mar. 2025 "Monetary policy **would act** to ensure that longer-term inflation expectations were anchored at the 2% target."

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Rob Wood @robwoodecon.bsky.social · 20/03/2025

Job growth is far from great, but it does seem to be improving from a soft patch in the second half of last year. Payroll tax hikes are a risk to employment, but the blood-curdling business warnings are failing to show up in the hard data. We expect that to continue; jobs will hold up.

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Archie Hall @archiehall.bsky.social · 17/03/2025

Fun chart from @robwoodecon.bsky.social on how decoupled the British and American economies now look.

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Rob Wood @robwoodecon.bsky.social · 20/03/2025

The BoE turned more cautious. They added flexibility to skip a quarterly cut and raised concern about inflation persistence, adding that policy would anchor expectations. They have been far too sanguine about expectations, but they are well above normal levels. The MPC needs to be careful.

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Rob Wood @robwoodecon.bsky.social · 14/03/2025

The latest Bank of England inflation attitudes survey shows long-term expectations high and rising, especially once we adjust for the structural break in the BoE data in 2020. The MPC is wrong to assume this year's inflation rise will have no second-round effects.

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Rob Wood @robwoodecon.bsky.social · 21/02/2025

A clear picture is emerging about the UK economy late last year. A temporary slowdown, rather than collapse. Growth dipped in October as consumers worried about tax hikes, but spending has rebounded. Retail sales rose 1.0% November-to-January, matching GDP improvement (1/2)

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Rob Wood @robwoodecon.bsky.social · 19/02/2025

January inflation is just the start. More government set price rises will push inflation to 3.7% in September. 4% is possible. Granted, underlying services inflation slowed. But surveys say disinflation is over, and the MPC have a new problem from goods inflation. Core still looks strong.

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Rob Wood @robwoodecon.bsky.social · 18/02/2025

There is little sign of a 'non-linear' UK jobs collapse. After the predictable payrolls revisions, employment is stalling—far from rosy, but also far from the collapse dire business survyes suggest. Vacancies have stabilised and jobless claims have fallen since October.

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Rob Wood @robwoodecon.bsky.social · 13/02/2025

Well. The economy is in better shape than thought. Monthly output now looks to have been trending up late last year. The consumer seems fine, with strong spending in pubs offsetting weak retail sales. Uncertainty and taxes hit capex though. But growth can rebound in 2025.

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Rob Wood @robwoodecon.bsky.social · 11/02/2025

So how weak is the UK consumer really?

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Rob Wood @robwoodecon.bsky.social · 07/02/2025

This is spot on, only the vote was dovish and I see no signal in two voting outliers. Mann seemed to attempt, if there is such a thing, a ‘hawkish 50bp cut’. Maybe careful was entirely intended to counter that vote.

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Rob Wood @robwoodecon.bsky.social · 06/02/2025

Two votes for 50bp cut from MPC grabs market attention, but BoE pay settlements survey at top of the 2-4% range MPC were anticipating strongly points to caution from rate-setters. Still too strong for inflation at target.

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Rob Wood @robwoodecon.bsky.social · 05/02/2025

Well, hello PMI services output price balance, and 5%+ 3m/3m annualised underlying services inflation again.

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Rob Wood @robwoodecon.bsky.social · 05/02/2025

And the survey says.... disinflation is over as rising costs boost inflation and cut jobs. Tricky trade-off for the MPC, they will want to focus on supporting employment but need to watch accelerating inflation.

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Rob Wood @robwoodecon.bsky.social · 03/02/2025

The final UK manufacturing PMI emphasises the big picture today. Growth is weak, but look at these price trends too. Believe this and disinflation is over with core CPI inflation still above 3% year-over-year.

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Rob Wood @robwoodecon.bsky.social · 31/01/2025

It's almost like have a large effective home market gave incentives to invest. Worth reflecting on as the Chancellor scrabbles around for ways to boost investment.

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Rob Wood @robwoodecon.bsky.social · 31/01/2025

Nationwide house price index gain of only 0.1% m/m in January superficially suggests slowdown. But the indices are volatile; mix adjusting houses is hard. Never look at one monthly change. Strip out the noise and house price inflation is trending up, nearing 6% m/m annualised.

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Rob Wood @robwoodecon.bsky.social · 30/01/2025

Not much sign of consumer gloom in the BoE's borrowing data this morning. Mortgage approvals rebounded and will keep rising strongly judging by buyer enquiries. Households squirrelled away less in bank accounts than most of last year too, supporting spending.

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Kien Tan @kientan74.bsky.social · 29/01/2025

We’ve been making this exact point in our retail briefings this week. Inflation may have subsided and incomes may be rising, but continued “sticker shock” at the shops means that inflation is the #2 concern of UK consumers… and only just.

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Rob Wood @robwoodecon.bsky.social · 29/01/2025

The BoE MPC need to be careful about structural changes raising inflation, like increasing inflation attentiveness. Households are watching inflation closely now and expectations responding. Rate setters cannot afford to 'look through' headline inflation like they used to.

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