Highlights of the latest Bank of England’s Agents Summary of Business report 8 November 2017
- Growth in activity had remained broadly stable. Manufacturing output growth had risen again, with export supply chains supported by the past fall in sterling and some signs of increased domestic sourcing. But construction output growth had eased. Services turnover growth remained moderate.
- A survey of investment intentions pointed to continued modest growth in spending over the coming year, at a similar rate to that seen over the past twelve months. Expectations of investment growth in the following two years were weaker.
- Recruitment difficulties had intensified and were above normal in a range of activities, alongside continued modest employment growth. As a result, pay growth had edged up and was expected to be somewhat higher in 2018 than this year. But non‑labour input cost inflation had eased and both output and consumer price inflation were unchanged.
- Consumer spending growth was little changed
- Growth in business services turnover had remained moderate
- Manufacturing output growth had strengthened further
- Construction output growth had eased
- Housing market demand had strengthened overall
- Capacity utilisation had remained slightly above normal in manufacturing and service
- Employment intentions pointed to modest growth in staffing over the next six months. Recruitment difficulties had increased and were above normal in a range of activities
- Annual materials cost inflation had fallen back overall. The rate of inflation in manufacturers’ output prices had plateaued. Business services price inflation had remained moderate
- Consumer price inflation had remained unchanged, both for goods and services. In groceries, pass‑through of higher import costs had been incomplete due to competitive pressures
It’s a moderately positive report. There’s nothing here to say that the UK economy is going to be booming anytime soon but neither are there any major worries that it’s going to crater. Something to note is the summary on London house prices being stretched, and that construction is picking up further out.
The comment on CPI adds to the bank’;s view about inflation topping out.
Not much here for traders but some have found enough good news to add 10 pips to GBPUSD as it rises to 1.3145.
The full report is here; BOE Agents Business report Nov 2017