Archive

March 20, 2025
2025-03-20 UK_head.png

UK: Tight Jobs Market Persists Into 2025

  • Unemployment remained at 4.4% in January amid rapid employment growth. Recent data suggest that the unemployment rate will likely decline over the next few months.
  • Regular wage growth adhered to its 0.4% m-o-m trend. The headline is near 6%, leaving no progress over the past year. Financial sector bonuses weigh temporarily on total pay.
  • Doves can temporarily dismiss this inconvenient resilience as unreliable noise, but the obvious risk is that it’s genuine and monetary stimulus has already become excessive.

By Philip Rush

March 13, 2025
2025-03-13 Trade_head.png

Heavy Metal Trade War

  • Volatility in US trade policy continues a cleaner tightening trend against China in the well-established tech war. Tariffs are a tool, but so are export restrictions.
  • China expanded restrictions on rare earth mineral exports to license critical materials like tungsten. The West lacks friendly suppliers and struggles to develop alternatives.
  • European defence investments may flounder. Japan and Korea may also suffer, so they can indirectly frustrate the US. Aggressive trade policy hits volumes as well as prices.

By Philip Rush

February 27, 2025
2025-02-27 EA_head.png

EA Resilience Is Perfunctory Problem

  • Crashing US surveys in 2025 have looked idiosyncratic, as spurious exaggeration of exceptionalism ends. The ESI corroborates the PMI’s resilience in the euro area.
  • Price expectations have been trending further above long-run averages without a one-off shock, suggesting European policy is too loose for this stage of the economic cycle.
  • EA unemployment remains lower than a year ago, inconsistent with tight monetary conditions. We still see the ECB’s last cut in June, much sooner than the market prices.

By Philip Rush

February 18, 2025
2025-02-18 UK_head.png

UK: Hawkish Alignment As 2024 Ends

  • Unemployment’s rising trend was a dovish crutch broken by stability in December, with the turn in underlying changes repeating the hawkish patterns after Jul-23 and Feb-24.
  • An intensification of wage growth to 0.7% m-o-m extended its hawkish trend to return the annual rate to around 6%, meaning no progress on where it started the year.
  • Payback in unemployment follows that in GDP, bringing the data to a more consistently hawkish position at the end of 2024. We still only expect a final BoE rate cut in May.

By Philip Rush

By country