Archive

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

October 20, 2025
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Credit Cockroaches Incubating

  • Write-downs at two regional banks follow the cockroaches of First Brands and Tricolor bankruptcies, and should not be dismissed as isolated idiosyncratic events.
  • Overly accommodative monetary conditions are stimulating markets to incubate cockroach eggs that may spawn as private credit malinvestment in the next recession.
  • It is too early for these eggs to hatch, aided by the warm support of further Fed rate cuts. So, risk assets will probably keep on rising in the void of economic data releases.

By Philip Rush

October 16, 2025
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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

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