Archive

Indonesia: Policy Rate Held At 6.0% (Consensus 6.0%) in Nov-24

• Bank Indonesia held the BI-Rate at 6.00%, aligning with expectations, citing controlled inflation within its 2.5% ±1% target and global economic uncertainty as critical factors influencing its cautious stance.
• The central bank's policy framework prioritises Rupiah stability amid geopolitical risks and external pressures, supported by robust foreign reserves of $151.2 billion and macroprudential measures encouraging credit growth in priority sectors.
• Future rate adjustments will depend on inflation trends, external shocks, and global market dynamics, with monetary and fiscal policy synergy essential to sustaining economic resilience and growth into 2025.

UK Inflation Flies Cuts To 2025

• A surprising airfare rebound extended CPI inflation’s energised rise to 2.3%. Its higher weighting in core and services measures compounded the upside surprise there.
• Underlying inflation also strengthened on other measures, like the median, and looks inconsistent with a sustainable return to the inflation target.
• We still expect inflation to trend above the target in 2025 on excessive unit labour cost pressures. The BoE can remain gradual in its easing cycle, skipping a cut in December.

By Philip Rush

EA Inflation Doesn’t Need A 50bp Cut

• October's final Euro area inflation print confirmed its surprisingly steep rise to 2% y-o-y. Strength was not only broad across countries but components with median rates rising.
• Underlying inflation pressures were broadly above expectations and target-consistent levels. Upwardly revised labour cost growth won’t help sustain 2% HICP inflation.
• Confirmed price and wage inflation strength adds to hawkish GDP and unemployment news, curbing the case for 50bp to remain less likely than the dovish market hopes.

By Philip Rush

US Politics: “Liquid Gold”

• Donald Trump will do whatever he can to deliver on his promise to cut energy prices in half within 12 months. But factors outside of his control will prevent him from achieving anything more than a modest ‘win’, if that.

By Alastair Newton