Archive

July 16, 2025
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UK CPI Lifts Hawkish Case in June

  • UK inflation surged 0.2pp beyond the consensus again in June, with underlying inflation measures broadly inconsistent with the target and headlines moving the wrong way.
  • The consensus is failing to learn the lesson of intense underlying pressures. The CPI rate rose 0.6pp since Jan instead of falling 0.4pp and is 1.4pp higher than called a year ago.
  • Policymakers seem infected with dovish fear about the labour market ahead of August’s meeting. CPI is 0.9pp higher in our year-ahead forecast, and we were right a year ago.

By Philip Rush


July 16, 2025
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Indonesia: 25bp Rate Cut To 5.25% (Consensus 5.25%) in Jul-25

  • Bank Indonesia cut its benchmark rate by 25bp to 5.25% in July 2025, marking the fourth easing since September amid low inflation and strong foreign exchange reserves.
  • The decision reflects confidence in 1.87% June inflation staying within the 2.5±1% target range, the stable rupiah supported by a robust intervention framework, and the need for growth stimulus.
  • Future easing depends on continued inflation anchoring, currency stability, and global developments, including US trade policy and Federal Reserve actions affecting capital flows.

July 15, 2025
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US Inflation Creeps In Quietly

  • Rebounding headline and core US inflation in June understated the underlying growth, with shelter rising at its slowest pace since August 2021. Tariff pain crept in belatedly.
  • Commodities, less food, energy and car prices grew by 0.3% m-o-m, the fastest since Feb-23, and services (ex-shelter) hit 0.4% m-o-m, both inconsistent with the target.
  • Less than half of the post-election surge in expectations has survived so far. Further rises remain likely, even if sustained avoidance smooths and reduces the full impact.

By Philip Rush


July 14, 2025
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Tuning Tariff Impact Estimates

  • President Trump’s tariff policy seemingly follows a random walk with a drift towards deals. Path dependency raises risks and uncertainty around his volatile whims.
  • Corporate avoidance measures have spared their customers from most of the pain, but Vietnam’s deal as a template could belatedly bring more of the pain to bear.
  • We assume most countries stay at 10%. The impact of others rising to 20% may be smaller than the anti-avoidance hit, with the total now worth less than 0.4% to UK GDP.

By Philip Rush