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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Dec 17 2014

U.K. Cyclical Prospects

The U.K. economy has enjoyed healthy growth since 2013, with both GDP and the job market steadily improving, after succumbing to two recessions since the Global Financial Crisis. We correctly forecast the current cyclical upswing in late 2012, using ECRI’s array of specialized U.K. leading indexes.

Today the consensus view is that the U.K. economic outlook is still robust, remaining one of the few bright spots among the developed economies. Meanwhile, the Bank of England (BoE) is calling for just a slight moderation in growth in 2015, but for consumer price inflation to reach its 2% target only in 2017.

In the context of this seeming contradiction, ECRI has just completed an in-depth analysis of our cyclical framework for the U.K., which includes leading indexes of aggregate economic activity, employment, inflation and trade, as well as sector-specific leading indexes for services and manufacturing. This analysis provides critical insights into evolving cyclical crosscurrents, along with its implications that may very well produce a shift in BoE monetary policy guidance.

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Detailed Interview on our Approach

Real Vision TV December 5, 2014

Discussing ECRI's research approach, with comments on the outlook, in a 69 minute interview with Real Vision TV. More

 

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