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The UK’s CBI Industrial Trends Orders reading improved to -27 in March, better than the -30 forecast and slightly above the previous -28. Even so, the index remains deep in negative territory, showing that manufacturing order books are still weak overall. The slight improvement suggests conditions became less bad, but not strong enough to signal any real rebound in industrial demand.

Source: Confederation of British Industry (CBI)

The UK’s February public-finance data showed a weaker fiscal picture. Public sector net borrowing rose to £14.30 billion, well above the £8.70 billion forecast and a sharp deterioration from the previous -£31.90 billion reading. At the same time, the public sector net cash requirement stood at £7.610 billion, compared with -£59.402 billion previously. The figures suggest government financing needs increased notably in February, pointing to renewed pressure on the fiscal position.

Source: Office for National Statistics

Goldman Sachs has pushed back its forecast for the Bank of England’s first rate cut to 2027, after the central bank kept Bank Rate at 3.75% and warned that the Middle East war could lift inflation through higher energy prices. Goldman had previously expected quarterly cuts to begin in July 2026, but now sees a slower easing path beginning next year and ending at a 3.0% terminal rate.

The shift follows a distinctly hawkish BoE hold. The BoE said inflation could rise to around 3.5% over the next two quarters and stressed the risk that higher inflation expectations could become embedded. Goldman also said there is still a meaningful chance of a near-term rate hike, potentially as soon as April, if global energy prices keep climbing. Reuters added that other major banks, including J.P. Morgan and Morgan Stanley, have also delayed their easing expectations as the Hormuz shock feeds through to Europe’s inflation outlook.

Source: Reuters; Bank of England.

The Bank of England left its policy rate unchanged at 3.75% in March, in line with expectations, but the voting split was clearly more hawkish than markets anticipated. The MPC voted 9-0 to keep rates unchanged, while no members voted for a cut even though the market had expected two votes for easing. The result suggests the BoE is not yet comfortable signaling near-term rate cuts and still sees enough inflation or macro risk to maintain a firmly cautious stance.

Source: Bank of England

The latest UK labor-market data showed a mixed but broadly steady picture. The unemployment rate held at 5.2% in January, slightly better than the 5.3% forecast. Employment change came in at 84K, well above the expected -4K and stronger than the previous 52K, pointing to continued resilience in hiring. But wage data softened. Average earnings, including bonus, slowed to 3.9% from 4.2%, while average earnings excluding bonus eased further to 3.8%, below the 4.0% forecast and down from 4.1%. At the same time, claimant count change rose to 24.7K in February from 4.7K, showing that some pressure is still building beneath the surface. Overall, the data suggest the UK job market is holding up better than feared, but pay growth is cooling and labor-market tightness is gradually easing.

Source: UK Office for National Statistics (ONS)

The UK’s latest 5-year Treasury Gilt auction cleared at 4.228%, up sharply from 3.810% previously. The rise suggests investors demanded a higher yield to hold medium-term UK government debt, pointing to tighter funding conditions and persistent rate sensitivity in the bond market. In simple terms, the government had to offer a noticeably higher return than in the prior auction to attract buyers.

Source: UK Debt Management Office

The latest Rightmove House Price Index showed a mixed picture for the UK housing market. On a monthly basis, house prices rose 0.8% in March, improving from 0.0% previously and pointing to some short-term momentum in asking prices. However, the annual reading slipped to -0.2%, down from 0.0%, indicating that the broader housing market is still struggling to build sustained year-on-year price growth. The data suggests that while seasonal demand may be offering some near-term support, the overall market remains soft.

Source: Rightmove

The UK economy was flat in January, missing the 0.2% growth expected by the market, even as the broader three-month growth rate held at 0.2%. The detail was mixed: manufacturing output edged up 0.1% month-on-month, industrial production slipped 0.1%, and construction output rose 0.2%. The brighter point came from external trade, where the trade deficit narrowed sharply to £14.45 billion from £22.72 billion, with the non-EU trade gap improving to £3.46 billion from £10.99 billion. Overall, the latest data suggest the UK entered the year with soft domestic momentum, but a much better trade position helped cushion the slowdown.

Source: Office for National Statistics (ONS).

UK consumer sentiment weakened in March, with the Thomson Reuters IPSOS PCSI falling to 46.0 from 49.0 previously. The drop suggests British households turned more cautious again, pointing to a softer confidence backdrop at a time when spending and growth expectations remain fragile.

Source: Thomson Reuters / IPSOS PCSI

The BRC Retail Sales Monitor showed UK retail sales growth slowing to 0.7% YoY in February, down from 2.3% in January and below the 2.0% consensus, pointing to a softer consumer backdrop after the post-holiday rebound.

Source: British Retail Consortium (BRC).

The UK’s mortgage rate (Feb) eased to 6.59% from 6.62%, a small decline that could marginally improve affordability at the margin, even as rates remain elevated.

Source: Bank of England / UK mortgage market data

The Halifax House Price Index (Feb) showed prices rose +0.3% m/m (in line with +0.3% expected, but down from +0.8% prior). On a yearly basis, house prices increased +1.3% y/y (vs +0.9% expected; +1.1% prior), indicating the housing market remains firmer than forecast despite slower monthly momentum.

Source: Halifax