Supplement 16 July 2023 - BoE Financial Stability Report

Propenomix with Adam Lawrence

In this episode -

1. UK Retail sales up 4.2 per cent in nominal terms, down nearly 5 per cent after inflation adjustments

2. UK unemployment up to 4 per cent, a surprise jump from 3.8 per cent compared to forecasts - good for rates

3. Average earnings up 7.3 per cent annualised using the last 3 months as the base - bad for rates as seen to be driving inflation

4. RICS house price balance -46 per cent (so of those surveyed, 73 per cent reported a downwards market in pricing terms, 27 per cent reported sideways or upwards) - back to the negatives of January and February, but at what’s normally a good time of year to sell - this will filter through to Q3/Q4s figures. Tough time to be a sales agent

5. GDP down 0.4 per cent for the year - avoided the technical recession (remember, two quarters in a row of negative growth) - but the effect is similar - teetering on the brink of abject sideways movement - weak as water

6. In the Bank of England’s own words this week: “The global economic outlook is highly uncertain, and the risk environment is challenging”. Pope also catholic in shocking revelation……

7. Homeowner mortgage payments aren’t looking as if they will increase as much as you would be led to believe if you trusted the mainstream media for your economics news

8. UK banks still look solid and very resilient

9. UK companies don’t have as much debt maturing in the next 12-18 months as in previous cycles - they are stronger in cash terms, just as households are

10. Nonbank financial institutions are not as strong or resilient and it is an international task of some magnitude to fix this problem (nonbank FIs would include insurance firms, venture capitalists, currency exchanges, some microloan organisations, and pawn shops)