Economics – New research on business conditions
28 June 2021The Bank of England has released its latest Summary of Business Conditions, covering Q2 2021. This document gives a good view of a UK economy in recovery after...
The Bank of England has released its latest Summary of Business Conditions, covering Q2 2021. This document gives a good view of a UK economy in recovery after the trauma of COVID-19. Key points are as follows:
Overall consumer demand for goods and services is rising
Growth in grocery demand has levelled-off
B2C logistics remain in growth, although this may level-off as physical stores continue to reopen
Manufacturing is strong, although logistics problems and shortage of materials is limiting output
The residential property market is very bullish, but interest in retail property is fairly weak for now
Labour demand is growing and employer report labour shortages in some areas
Wages are rising in some roles, although not all
Rising input costs and limited capacity are causing production cost to rise
The implications for future inflation have attracted some interest in the mainstream media.
The Bank suggests that consumer inflation might rise from the current level of +2.1% to +3.0% by year-end, declining again thereafter.
This, however, is not a new finding – it was suggested in Monetary Policy reports earlier this year.