Archive

November 11, 2024
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US Politics: Promises, Promises

  • For all of Donald Trump’s unpredictability, one issue he has been consistent with for many years is the use of tariffs to redress the ‘unfair’ trade practices he believes to be the cause of US trade deficits. Bargaining chip or not, this Hobbesian view poses a massive threat to the global economy.

By Alastair Newton

November 07, 2024
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BoE Cuts Between Pauses

  • The BoE matched widespread expectations and cut by 25bp to 4.75%. As we forecast, only one MPC member hawkishly dissented, although the overall news wasn’t dovish.
  • Tax rises feed substantial upwards revisions to the inflation outlook that postpone and shrink the BoE’s expected undershoot of the inflation target until 2027.
  • Gradualism discourages cutting until the impact becomes clearer with pay settlements in the new year. We still expect the BoE to pause until February before cutting again.

By Philip Rush

November 06, 2024
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Risk Clears On The Western Front

  • Donald Trump won the US election with scope to implement his plans as the Republican Party also took the Senate and is likely to retain the House in a clean sweep.
  • The nonlinear geopolitical risk of an inconclusive political void being exploited has safely dissipated, clearing the way for renewed equity market strength.
  • Structural US economic outperformance of Europe will likely increase amid renewed deregulation, but fiscal deficits should stoke the term premium and curtail rate cuts.

By Philip Rush

November 05, 2024
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UK Budget: Where’s The Plan?

  • Markets should not have been as surprised as they were by what Chancellor Rachel Reeves said in her budget speech. But they are right to be nervous about the absence of anything resembling a road map for reform. She needs to do better at the Mansion House on 14 November.

By Alastair Newton

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