Archive

November 13, 2025
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UK: Return To Residual H2 Gloom

  • UK GDP disappointed in Q3 at 0.1% q-o-q after the ONS revised away August’s surprise resilience and led it into a slight September fall, setting up for a soft Q4 too.
  • Residual seasonality in service sector growth has reasserted itself on the average post-pandemic path. So statistical stories seem more plausible than fundamental ones.
  • Weakness in labour market activity is more relevant. The hawkish half of the MPC probably needs disinflationary news to support a cut, but the Governor seems swayed.

By Philip Rush

November 11, 2025
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UK: Jobless Embolden Bailey’s Cut

  • Another disappointing rise in the unemployment rate should embolden Bailey’s bias to cut rates in December. Falling net underemployment contradicts, but is easily ignored.
  • Another step down in payrolls, matched by employment this time, could be blamed on fears for the Budget. Redundancies also spiked, although vacancies are stable.
  • Headline pay growth is slowing as expected, while the monthly impulse remains excessively strong, so the hawks are unlikely to see inflation persistence as broken.

By Philip Rush

November 05, 2025
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Rebound To Resilience

  • The diverging services PMI and ISM resolved bullishly in October, with activity broadly back to 2024 averages. The ISM headline still looks lower because it is a composite.
  • Price balances remain extremely elevated while employment’s weakness has become less acute, skewing the trade-off more hawkishly for any policymaker’s preferences.
  • The broader global deterioration in PMIs and unemployment last month also recovered in the latest round of releases. These data are not screaming for any more easing.

By Philip Rush

October 29, 2025
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Credit For Inflation

  • Credit and monetary holdings are booming in the UK, enabling consumers to spend their devalued pounds, supporting CPI inflation beyond the target.
  • Falling rates have neutered the refinancing shock, facilitating the affordability of loan demand. Rapid ongoing wage growth further reduces the debt burden.
  • The ECB also sees bullish monetary trends, but they only took it to a good place. The BoE is not in a good place, with policy accommodating above-target inflation pressures.

By Philip Rush

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