The Cabinet Office’s monthly measure of consumption released this week showed a substantial upward revision for July and a rebound in August. That indicates that the second wave of infections acted as a lighter brake on spending than first thought, and has prompted us to revise up both our consumption and GDP forecasts for Q3. Meanwhile, private banks expect loan growth to slow over the coming months as the economic recovery continues. But while bank lending growth is coming off the boil, we think the rise in the money supply has further to run.
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