Archive

August 12, 2022
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UK: Holidays Reduce Output in Jun-22

  • UK GDP contracted by 0.6% m-o-m in June after a downwardly revised 0.4% growth in May, which appears to confirm the distortions from the Diamond Jubilee holidays.
  • Some positive payback should occur in July as the output level normalises with the number of working days. However, GDP looks to be trending barely better than flat.
  • Aggressively increased interest rates will compound inflation’s squeeze on the cycle, raising the risk of a needless recession when pressures are burning out anyway.

By Philip Rush


August 12, 2022
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HEW: Europe’s Inflation in Jul-22

  • Over the past week, UK GDP confirmed the distorting effect of bank holiday changes as the economy more than unwound May’s rise. Surprisingly low US inflation may have eased some pressure on the BoE to “go big” again in September.
  • Next week is the busy one loaded with most of the UK’s top-tier data, where we are in line with the consensus CPI inflation rise in July. Final EA inflation data will also reveal the details behind its surprise strength, albeit with the “Big 4” already printed.

By Philip Rush (back from holiday on Monday)


August 05, 2022
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HEW: BoE Blowing with Global Winds

  • Over the past week, the Bank of England followed through with a 50bps rate hike, matching the market and economic consensus, but failing to stay true to stated guidance on its reaction function. It will reassess things blowing in the global winds.
  • Next week is especially quiet on the data front until Friday’s GDP release, which will reveal the other side of May’s spurious strength amid the bank holiday distortions.

By Philip Rush