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Indonesia: Stability Over Stimulus

• BI held the policy rate at 4.75%, matching the consensus, as rupiah weakness and capital outflows constrain near-term scope for further rate cuts.
• Despite a dovish bias and inflation within target, BI signals that any future easing will be gradual and conditional on rupiah stabilisation and better policy transmission.
• Market expectations still point to modest cuts toward 4.25% in 2026, but global yields, FX volatility and fiscal concerns could delay or reduce the extent of easing.

UK: LFS Fades Extremes

• Some of the support offered to both hawkish and dovish narratives faded in the latest labour market data, but this won’t break the case for any camp on the MPC.
• The unemployment rate held steady for the first time since July. Employment isn’t keeping up with the surging labour force, including students not finding flexible work.
• Redundancies retraced lower, and wage growth has slowed, but the fall in private pay is probably exaggerated by reclassification to the public sector. We still see no more cuts.

By Philip Rush