How hard will the credit crunch hit the economy?

In a special report, the ITEM Club looks at the effects of the credit crunch on a number of the world's economies, and concludes that a consumer slowdown is likely in the UK as real incomes stagnate and interest costs rise. There is also a real risk that the growth in the UK's financial services industry - which last year contributed 0.8% to UK GDP growth - could be cut right back over the coming year. Furthermore, employment reductions and loss of bonus payments in this sector could knock the stuffing out of the UK housing market.

Read the ITEM Club's special report  216K, September 2007

The ITEM Club looks to the MPC for careful management of interest rates

In its Summer 2007 Forecast, the ITEM Club says that the Monetary Policy Committee needs to tread a careful line, aiming to restrain the housing market and the growth in the money supply, but without raising interest rates to a damaging level. ITEM believes an interest rate of 6% should be sufficient to achieve this, as the CPI inflation measure is already falling back and should reach the 2% target by the winter.

ITEM’s forecast for UK growth in 2007 is unchanged at 2.9%, falling to 2.5% next year as household budgets are hampered by higher interest payments and fiscal drag. Business confidence remains high, with investment expected to grow by 6.5% this year and 3.5% in 2008. And despite the strength of the pound, exports are holding up in a generally strong world market.

Our summary of the ITEM Club's Summer forecast, Economic Outlook for Business, includes the implications for business.   360K, June 2007

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ITEM Club says success in services is the key to the UK's economic success

In a special report, the ITEM Club highlights the huge role that services - and in particular financial and business services - have played in the UK's economic success. Over the last five years these two sectors have contributed 60% of the growth in GDP, and this success has meant that the UK service sector as a whole has grown faster than that in the US, Japan or western Europe.

ITEM's analysis looks at the contribution of financial and business services to UK growth, productivity, competitiveness, trade, investment and regional development. It also looks at the drivers of these sectors' success, at future opportunities, and at how the UK can maintain its strong lead in these highly significant industries.

Read the ITEM Club's analysis  320K, May 2007

'UK is riding high on the global M&A boom' - ITEM Club

In a special report, the ITEM Club looks at the current boom in global M&A activity which reached $4 trillion in 2006. The total value of transactions has doubled in the last three years on the back of rising stockmarkets, and ITEM forecasts that it will peak at $5 trillion next year.

The ITEM Club's analysis explores the links between M&A activity and monetary conditions, economic activity and equity prices, and shows how the UK economy benefits from the large number of deals done in the City of London.

Read the ITEM Club's analysis  300K, April 2007