September 13, 2022
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US Midterms: Reading the Runes

  • As recently as three months ago, opinion polls were consistent with the historical pattern in telling us that the Democrats would lose control of both Houses of Congress in the US midterms. However, the race for each House now looks to be too close to call with confidence.

By Alastair Newton

September 12, 2022
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UK: GDP Normalisation Falls Flat in Jul-22

  • UK GDP rebounded by 0.2% m-o-m in Jul-22 after depressing bank holiday shifts. Merely returning to Feb-22 levels confirms that the UK economy is flatlining.
  • Another new Bank holiday on 19 September will likely tip the economy into a technical recession. Surveys are also indicating increasingly broad-based contractions.
  • The government’s energy price guarantee will curb the winter squeeze and the need for excessive monetary tightening. UK asset values can temporarily outperform.

By Philip Rush

September 08, 2022
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UK: Bullishly Capping Yields with Energy

  • Inadequate energy supply for the winter has squeezed wholesale prices up, taking yields with it owing to the BoE’s fear of high spot inflation fuelling second-round effects.
  • The UK government’s new energy price cap removes this as a direct source of inflation and a reason to hike rates near market pricing. It is tactically bullish for the UK.
  • Price caps do not fix supply, so rationing remains likely. Along with the painful fiscal costs, this unimaginative scheme means bearish pressures may reassert in the winter.

By Philip Rush