UK | Input shortages continue to escalate
Input shortages were the key theme of this week’s business surveys. Manufacturers continue to struggle with global component shortages, while producers and firms in the services sector reported problems finding labour. While activity growth remains strong, stock levels have fallen to record lows.
What you will learn:
- Component shortages may start to ease through H2 2021, but problems will not likely be fully resolved until 2022.
- The labour market situation is more nuanced and there are clearly some serious sector-specific issues. But the impending
end of the furlough scheme should ease some of the frictions that have become apparent in the services sector in recent months.
- With no ONS releases published this week, business surveys took centre stage.
BoK’s monetary policy to tighten even as hiking cycle ends
Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.Find Out More
Why China isn’t about to save the world economy
The earlier and faster than expected ending of zero-Covid restrictions in China bodes well for the global economy and adds to the recent run of positive news.Find Out More