Archive

February 17, 2026
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UK: A Lame Horse Year?

  • The UK labour market ended 2025 on a disappointingly feeble note, with unemployment rising to 5.2%. Methodology and tax contributed, so the cyclical change isn’t so bad.
  • Wage growth also slowed in 2025, with disagreement about the extent. Most measures remain above 4%, although the distorted public vs private split depressed the latter.
  • Dovish BoE assumptions can lean on labour market weakness to cut again soon. We still lean towards the 30 April MPR, but soft CPI inflation could push Bailey to 19 March.

By Philip Rush

February 12, 2026
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UK GDP Softly Turns In Q4

  • Half of last month’s upside GDP growth surprise was revised away with the December data, tempering Q4 growth back to our 0.1% q-o-q forecast while disappointing others.
  • An encouraging mix skewed to services output meant the underlying performance still trended up during Q4. We now track 0.4% for Q1, aided by residual seasonality.
  • Revisions to December, or a belated catch-up to trend, could make this even stronger. It is the flip side of soft H2 performances, and the dovish BoE is focused on other things.

By Philip Rush

January 29, 2026
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EA: Goldilocks In The Good Place

  • Surveys of output in the Euro area are converging on a core narrative of resilience, with the ESI the highest in almost three years and broadly shared among member states.
  • Price expectations have fallen for businesses in the consumer goods sector, but this isn’t because of weak demand. Retailers are most optimistic about sales in four years.
  • Less uncertainty about better growth is bullish, but not hawkish, amid a disinflationary shock. The ECB should enjoy being in a good place, like Goldilocks, without the bears.

By Philip Rush

January 22, 2026
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UK: Only A Little Less Fiscally Bleak

  • The UK public finances ended 2025 bullishly with cash receipts jumping ahead of forecasts, sending an encouraging signal ahead of January’s critical tax deadline.
  • Tracking a slightly better performance in 2025-26 is unlikely to create a post-pandemic low in borrowing after years of imprudence that relied on restraint rolling ever later.
  • Borrowing should be £30-40bn above the initial forecast for this year, made during the depths of covid doom. Fiscal slippage remains the real rule investors should remember.

By Philip Rush

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