Archive

February 12, 2026
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UK GDP Softly Turns In Q4

  • Half of last month’s upside GDP growth surprise was revised away with the December data, tempering Q4 growth back to our 0.1% q-o-q forecast while disappointing others.
  • An encouraging mix skewed to services output meant the underlying performance still trended up during Q4. We now track 0.4% for Q1, aided by residual seasonality.
  • Revisions to December, or a belated catch-up to trend, could make this even stronger. It is the flip side of soft H2 performances, and the dovish BoE is focused on other things.

By Philip Rush

February 11, 2026
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UK: Unsustainable Wage Growth

  • Wage growth of 3.25% is unlikely to be consistent with achieving the 2% inflation target, contrary to the BoE’s assessment that relied on consistently dovish-biased assumptions.
  • Stagnant productivity and a recovery in profit margins are problems that should inform any coincident assessment. But the Bank is relying on the world to bail out UK excesses.
  • The Euro area and China are not structurally exporting disinflation anymore, and the latter is not politically tolerable. The biased BoE seems set to keep missing its target.

By Philip Rush

February 09, 2026
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UK Electoral Hopes Rise In Asian Victories

  • Landslide victories for recently appointed Prime Ministers calling snap elections in Japan and Thailand offer hope to Labour MPs hoping Keir Starmer stands aside soon.
  • Peter Mandelson’s conduct is damned in the Court of Public Opinion, including evidence that he was unfaithful to his political colleagues and husband. Starmer can’t escape it.
  • Leadership challengers aren’t ready yet, so Starmer remains likely to limp on longer. But change will bring fiscal easing that the dovish BoE fails to anticipate adequately.

By Philip Rush

February 06, 2026
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HEW: BoE Goes Its Own Way

  • The BoE refused to behave like its peers this week, with a significant dovish shift in the vote despite a lack of news, even as others settle on holding steady or even hiking.
  • Those doves overshadowed the ECB’s calm stability after inflation matched forecasts by dipping to 1.7% in January. Disappointing US labour market news drove rates down.
  • Next week’s slightly delayed payrolls (and CPI) releases will help reveal the relevance of this week’s noisy signals. We also await UK GDP data turning in residual seasonality.

By Philip Rush

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