July 29, 2022
HEW: BoE Bracing Pressures
- Over the past week, Euro area inflation again exceeded our above-consensus forecast, and the Fed resisted hawkish pressures to overdeliver. European consumer confidence, the Ifo, and CBI all fell further, with pricing expectations appearing to ease.
- Next week is dominated by the Bank of England’s rate hike on Thursday, where we still expect it to hike by 25bps rather than raise the pace to 50bps. Unemployment in the euro area and final PMIs are other points of interest on the data side.
By Philip Rush
July 22, 2022
HEW: Policy Fudge Poisoning Activity
- Over the past week, evidence of activity destruction mounted across UK consumption and global PMI surveys, only partly because of painfully high non-core inflation. The ECB also fudged its new transmission tool to hike big before it’s forced to slow.
- Next week is a return to a relatively quiet calendar, where flash EA inflation for July is the highlight for us (aside from the Fed). Political manoeuvres also seem set to continue in Italy and the UK, although the latter is into a slower burning phase for the summer.
By Philip Rush
July 15, 2022
HEW: Inflation and ECB Rates to Rise
- Over the past week, UK GDP data were surprisingly strong but potentially distorted by the bank holiday shifts. Political shenanigans (and the weather) are getting more attention in the UK ahead of the busy week for releases.
- Next week contains UK inflation and the final EA print, where we are in line on the RPI but a tenth above on the CPI. We see a risk that the HICP rounds higher while expecting the ECB to deliver a 25bps hike as the hawks chose that over relaxing their principles.
By Philip Rush
