Economic Perspectives –

Surveys suggest growth continues to be hampered by supply problems and inflationary concerns

The latest Perspective from Ruth Lea CBE, Economic Adviser to Arbuthnot Banking Group.


29th November 2021


Ruth Lea CBE


In this Perspective Ruth Lea, Economic Adviser to the Arbuthnot Banking Group, discusses the latest UK data:

  • Markit’s flash indicators for November suggested growth continued in the month, but the results were overshadowed by continuing supply problems and inflationary pressures. 
  • The SMMT reported that car production was over 40% lower (YOY) in October, held back by the continuing shortage of semi-conductors.
  • The ONS reported that the number of EU nationals in the UK slipped to 3.4mn in year-ending June 2021, compared with 3.6mn in year-ending June 2020 and 3.725mn in year-ending June 2019.
  • The ONS warned that their data on EU nationals cannot be compared directly with the Home Office’s EU Settlement Scheme. For the record the total number of concluded applications under the scheme was 5.9mn on 31 October.
  • The ONS released country and regional GDP data for 2021Q1. They showed that GDP in England was about 7% lower in 2021Q1 compared with pre-pandemic 2019Q4, whilst in Scotland it was about 8% lower, in Wales about 5% down and in Northern Ireland about 3% down. There were also marked differences between the English regions, ranging from London (where GDP was 5% down) to the West Midlands (where GDP was 12% down).
  • The ONS’s detailed data on GDP of the UK’s countries and regions showed that London’s share of UK GDP was nearly 23% in 2019 and the South East’s was nearly 15%. Adding the East of England to London and the South East, to provide a total figure for the “South”, gives a total share of over 46%, nearly half of UK GDP.

International update:

  • The Markit flash indicator for November for the Eurozone continued to show growth, but optimism about the outlook fell on renewed COVID-19 worries and supply problems, amid continued inflationary concerns.
  • The Markit flash indicator for November for the US also showed continued expansion, but capacity pressures remained significant reflecting continuing labour and material shortages, and inflationary pressures remained problematic.
  • Oil prices dropped over 10% on 26 November on fears that the newly-discovered COVID variant (omicron) will dent energy demand over the coming months.    

Ruth Lea said “…if the findings of the latest UK Markit surveys are fulfilled, growth in 2021Q4 should be better than in 2021Q3, which would challenge the Bank’s November assessment that GDP growth would be just 1% (QOQ) in 2021Q4 after 1.5% in 2021Q3 (the ONS outturn suggested 1.3%). Either way growth should continue, but the economy remains hampered by supply problems and inflationary concerns. And there is now the possibility of tighter growth-inhibiting COVID restrictions being applied amid rising concerns in the UK, as well as in Europe.”





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Author -

Ruth Lea CBE

Ruth Lea CBE

Economic Adviser, Arbuthnot Banking Group

Ruth Lea CBE has been Arbuthnot Banking Group’s Economic Adviser since 2007 and was an Independent Non-Executive Director from 2005-2016.

Ruth co-founded Global Vision in 2007 and was Director until 2010, and was previously the Director of the Centre for Policy Studies (from 2004 to 2007), Head of the Policy Unit at the Institute of Directors (from 1995 to 2003) and Economics Editor at ITN (from 1994 to 1995).  Prior to ITN she was Chief UK Economist at Lehman Brothers, Chief Economist at Mitsubishi Bank, worked for 16 years in the Civil Service (the Treasury, the DTI, the Civil Service College and the Central Statistical Office) and was an economics lecturer at Thames Polytechnic (now the University of Greenwich).

She is the author of many papers and articles on economic issues and has been a Governor of the London School of Economics and Council Member of the University of London.

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