Reduced growth amid a more optimistic outlook later this year is the primary takeaway from the February rate decision by the Bank of England Monetary Policy Committee. This implies a slower pace of growth near 5% in 2021 followed by a rapid rebound closer to 7% in 2022. Moreover, the central bank does not intend to tighten policy until there is significant ... READ MORE >
United Kingdom
Bank of England: Deteriorating economic outlook and negative interest rates
The Bank of England at its meeting on Thursday is expected to keep its policy matrix unchanged as it downgrades its economic outlook and publishes its view on the use of negative interest rates. We expect the central bank to keep its policy rate at 0.1% and the total asset purchase program -- an important tool to stimulate the economy and ensure that ... READ MORE >
RSM U.K. Financial Conditions Index: Adjusting expectations after double-dosed shocks
The news that Oxford/AstraZeneca has created a vaccine that is potentially 62% effective with two full doses and 90% effective if a person gets a half a dose followed by a full dose is a much-needed boost for a beleaguered U.K. economy. This will bolster U.K. financial conditions and economic prospects heading into the end of the year. New cases of ... READ MORE >
More promise, more problems: Cyberattacks threaten life sciences companies researching COVID-19 vaccine
Picture this scenario: Researchers at a biotech company are working tirelessly on a potential coronavirus vaccine and planning to start a phase three clinical trial soon. This work results in more visibility for the company, and an influx of capital investment. But with that greater visibility and investment comes added risk, especially in the form of ... READ MORE >
Pricing in the end of the current British business cycle
The coronavirus has caused economies across to globe to adopt self-distancing as the de-facto public health policy to mitigate the spread of the disease. Nothing highlights the dangers of the virus and its spread more than the announcement that British Prime Minister Boris Johnson had tested positive for the disease. But the policy of self-distancing ... READ MORE >
Economics of a global health crisis
Global economic markets' reaction to China’s coronavirus has been severe, resulting in a significant safe-haven move into U.S. government securities by international investors. Whether the virus has a lasting impact on the broader global economy depends largely on the ability of the world’s major governments to effectively deploy resources to contain the ... READ MORE >
RSM Brexit Stress Index eases as general election draws closer
Stress in the UK financial markets continued to ease as the general election draws closer. The RSM Brexit Stress Index, which measures financial and economic risk surrounding Britain’s impending departure from the European Union, closed the week at 0.29 standard deviations above normal levels of implied stress. It marked the lowest level of risk in what ... READ MORE >
Brexit stress gets reprieve due to Supreme Court ruling
The RSM Brexit Stress Index eased slightly during the week, as Britain’s Supreme Court ordered the resumption of Parliament and restored some sort of order to the Brexit chaos. The composite index, which measures financial-market stress surrounding Britain’s impending departure from the European Union, closed the week at 1.20 standard deviations above ... READ MORE >
The RSM Brexit Stress Index: Reacting to a Parliamentary dose of recession prevention
The RSM Brexit Stress Index surged sharply during the week amid attempts by Boris Johnson, the Conservative Party prime minister, to curtail objections to a no-deal Brexit but eased at week’s end as Parliament regained control of government. The index rose as high as 1.97 standard deviations above normal at midweek, its highest level since the June 2016 ... READ MORE >
RSM Brexit Stress Index: Factoring in longer-term issues
The RSM Brexit Stress Index ended higher again this week on increased volatility. The composite index, which measures economic stress surrounding Britain’s impending departure from the European Union, closed at 1.74 on Friday from 1.64 a week ago. The foreign exchange market remains focused on Germany’s manufacturing recession and the direction of ... READ MORE >