Archive

July 30, 2025
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Activity’s Tariff Hangover In Q2

  • GDP growth broadly beat expectations again in Q2 on both sides of the tariff disruption. Euro area growth slowed by less, while the US rebounded vigorously.
  • Temporal distortions to demand didn’t open up slack as European supply growth stays stagnant. Surveys suggest it won’t appear in Q3 either as demand growth rebounds.
  • Underlying US GDP growth may have slowed, but the extent is modest and questionable. Rolling resilience should keep delaying rate cuts, preventing them from occurring.

By Philip Rush

July 29, 2025
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UK: Loans Secured Despite Tax Hike

  • Credit extended its rebound far beyond expectations in June. Reformed stamp duty raises costs and housing tenure, but it hasn’t broken the housing or mortgage markets.
  • Demand for loans looks more resilient than banks expected amid easing monetary conditions. Refinancing may not have much effect on cash flow anymore.
  • Higher transaction costs probably won’t break expectations into a downwards spiral, but are now widely cited as a major hurdle, contributing to slower UK activity growth.

By Philip Rush

July 28, 2025
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Opec: Twist Or Stick?

  • The further acceleration by ‘Opec+ eight’ in unwinding the second package of voluntary output cuts was a surprise, albeit one that left markets unmoved.
  • The cartel now appears to be firmly on track to complete its unwinding in September, even though its stated justifications for increasing output remain highly questionable.
  • Despite downside global growth risks, the Saudis in particular may press to start unwinding the first package, a move which may be announced as early as next week.

By Alastair Newton

July 24, 2025
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ECB: Watching the Good Place

  • The ECB kept its description of the policy setting as in a good place, and wants to watch the news in the next few months. Lagarde refused to emphasise September’s meeting.
  • Euro strength is depressing inflation below target in the near-term forecasts, but the ECB remains relaxed about this. It sees the outlook as broadly unchanged since June.
  • We still see rolling resilience in the economy and doubt US trade policy will break it. More rate cuts are inappropriate without demand destruction, so we don’t expect any.

By Philip Rush

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