Archive

October 17, 2025
2025-10-17 EA_head.png

EA: Inflation Rises Briefly In The Fall

  • Inflation’s rise to a high 2.3% in September was confirmed in the final print, although some payback remains likely in October. We doubt it goes fully back to the target then.
  • Underlying inflation metrics were broadly stable again at about 2.5%, with little progress in most statistical measures for over a year.
  • There is little cause for alarm at this stage, so the ECB can keep waiting in a good place, but we still see a greater risk of hikes than cuts in 2026.

By Philip Rush

October 17, 2025
2025-10-17 HEW_head.png

HEW: Cockroaches Startle Pricing

  • Losses on bad and fraudulent US loans raise the risk that more cockroaches will emerge, nourished by monetary policy stimulating asset prices outside of recessionary regimes.
  • Market rates fell on this, while macro data didn’t offer direction as UK Q3 GDP kept tracking 0.2%, EA inflation was confirmed, and UK labour market data were mixed.
  • Next week’s UK inflation data should reveal a rise, with the CPI reaching 4%. Delayed US CPI data will provide a rare signal more relevant to the Fed’s likely decision to cut.

By Philip Rush

October 16, 2025
2025-10-16 UK_head.png

UK: Unseasonably Resilient In Q3

  • Slight growth in August sustains an above trend level of activity and is tracking to a 0.2% q-o-q pace for Q3, matching our forecast and the consensus, but disappointing the BoE.
  • The ongoing slowdown in service sector activity repeats residual seasonality that would leave a trough in two months, but there is slightly more resilience this year.
  • Policymakers shouldn’t react to statistical noise, and are unlikely to amid ongoing excesses in underlying inflation that a stabilising labour market wouldn’t break.

By Philip Rush

October 14, 2025
2025-10-14 UK_head.png

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

By country