Archive

UK: Mixed Messages On Labour Market

• Most narratives can find some support in the latest labour market report, preserving uncertainty that should keep the BoE on hold at least until some clarity emerges.
• Unemployment has increased (LFS) or stabilised (payrolls), while pay is shockingly resurgent (inc-bonuses), slowing as expected (ex-bonus) or stagnating (private pay).
• Weakness isn’t as clear as the consensus and press sometimes make out, but concerns aren’t invalidated. We still expect resilience to preserve excess inflation hawkishly.

By Philip Rush

MAS Holds Course on Tightening

• MAS holds policy steady as Q3 GDP beats 2% consensus with 2.9% growth, core inflation at 0.5% for 2025.
• The central bank is less dovish on 2026 easing as the output gap stays positive through 2025, near zero in 2026.
• Tariff risks are contained as pharma exemptions are negotiated, and AI investments support manufacturing resilience.

HEW: Rate Surprises In The US Void

• Most central bank decisions surprised consensus expectations this week, despite the void over the US situation. Neutral rate views often contributed to the directional news.
• The Fed is encouraged to ease by the lack of evidence not to, stimulating market values further. The UK government is suffering from another likely downgrade to productivity.
• Next week’s calendar is thinned by the possible delay of the US CPI data, leaving the EA as the inflationary highlight. The UK gets a potentially hawkish labour market report.

By Philip Rush

Peru Holds Rates Near Neutral at 4.25%

• Peru held rates at 4.25% as expected, near its neutral level, with inflation at 1.4% approaching the target midpoint by year-end.
• Policy pause reflects balanced risks: benign domestic inflation vs global trade restrictions weighing on medium-term growth outlook.
• Future moves depend on inflation drivers, but immediate easing is unlikely given the proximity to the 2% neutral real rate estimate.