Archive

July 16, 2025
2025-07-16 UK_head.png

UK CPI Lifts Hawkish Case in June

  • UK inflation surged 0.2pp beyond the consensus again in June, with underlying inflation measures broadly inconsistent with the target and headlines moving the wrong way.
  • The consensus is failing to learn the lesson of intense underlying pressures. The CPI rate rose 0.6pp since Jan instead of falling 0.4pp and is 1.4pp higher than called a year ago.
  • Policymakers seem infected with dovish fear about the labour market ahead of August’s meeting. CPI is 0.9pp higher in our year-ahead forecast, and we were right a year ago.

By Philip Rush

July 15, 2025
2025-07-15 US_head.png

US Inflation Creeps In Quietly

  • Rebounding headline and core US inflation in June understated the underlying growth, with shelter rising at its slowest pace since August 2021. Tariff pain crept in belatedly.
  • Commodities, less food, energy and car prices grew by 0.3% m-o-m, the fastest since Feb-23, and services (ex-shelter) hit 0.4% m-o-m, both inconsistent with the target.
  • Less than half of the post-election surge in expectations has survived so far. Further rises remain likely, even if sustained avoidance smooths and reduces the full impact.

By Philip Rush

July 01, 2025
2025-07-01 EA_head.png

EA: Calm At The Inflation Target

  • An unsurprising achievement of the 2% target might urge a celebration at the ECB, but it does not demand policy action. Energy price declines can’t be relied upon to repeat.
  • The early consensus forecast was surprised on the upside, but raised by last week’s releases in France and Spain. So, while reassuring, this outcome is not dovish.
  • We expect inflation to stay close to the target, whereas the ECB forecasts a substantial drop below it, while calling policy well-positioned. We still see no more rate cuts.

By Philip Rush

June 18, 2025
2025-06-18 UK_head.png

UK Course-Corrected CPI Stays High

  • UK inflation unsurprisingly slowed in May as a correction to vehicle excise duty knocked 0.1pp from the rate, reversing all the upside to our above-consensus April forecast.
  • Services inflation aligns with the BoE’s forecast from its May forecast, where MPC members were biased towards slowing their easing. Underlying rates remain too high.
  • Inflation keeps trending above the consensus, cumulating a 1pp error since rate cuts began, but aligning with our forecast from 1yr and 2yrs ago. We remain hawkish.

By Philip Rush

By country