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December 17, 2025
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UK: Christmas CPI Present For Doves

  • UK inflation’s 31bps slowing to 3.15% went far further than expected, with significance raised by the substantial extent and the breadth of downside across divisions.
  • However, the news was more concentrated at a component level, leaving the median impulse annualising to 2.3%. We still see underlying pressures driving persistent excess.
  • The Governor sought confirmation of disinflation before cutting rates again, so this surprise should secure that move in December, without any commitment to do more.

By Philip Rush

December 17, 2025
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EA: Eating A Disinflationary Revision

  • Another downward food price revision cut HICP inflation back to 2.1% in November, but the effect was only 1.6bp, and services inflation was marginally stronger than before.
  • Service prices are not converging on levels consistent with the ECB’s target, and many underlying metrics are too high. The median is a notable exception, broadly below 2%.
  • The ECB’s “good place” assessment should be unaffected by any of this, nor the base effects driving things slightly below the target in January. It should sound neutral.

By Philip Rush

December 16, 2025
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UK: LFS Strengthens Policy Division

  • Doves and hawks on the MPC will find support for their views in the UK labour market data. It should strengthen divergent views in December, not resolve disagreement.
  • Another rise in the unemployment rate and a shocking spike in redundancies can feed dovish fears that activity in the labour market is breaking into disinflationary weakness.
  • Hawks can see another round of upwards revisions to wages, driving surprise persistence again. Total pay’s trend is stable in recent years, and regular pay is sticking too high.

By Philip Rush

December 16, 2025
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US: Noisy November After Reopening

  • US private payroll growth stayed steady through the government shutdown. Statisticians failed to collect much data for November, yielding a noisy surge in unemployment.
  • The employment-to-population ratio is steady, as are job openings and layoffs. Churn is still low, with few quits or hires, but broad resilience appears to remain unbroken.
  • Jobless claims are also stable into December, when headline data should improve. The Fed pre-empted bad news with past cuts and is unlikely to keep going in January.

By Philip Rush

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