Archive

UK: Turning the Statistical Corner

• The UK GDP surprise flipped to exceed expectations with 0.3% m-o-m growth in Nov-25 as residual seasonality turned past its trough. We now track 0.14% q-o-q for Q4.
• Further upside news is likely over the next few months as output surges again in Q1, pushing back dovish hopes for another rate cut. We still see the cutting cycle as over.
• Economists prefer to tell fundamental stories, ignoring statistical ones, but we should not be shocked by the impact of the predictable surprises created by this shortcoming.

By Philip Rush

Currency Constraint Ends Korea's Easing Cycle

• The BoK held the policy rate at 2.50%, in line with consensus, but effectively ended the easing bias, signalling a prolonged on-hold stance for 2026.​
• Despite improving growth and near-target inflation, FX weakness and financial stability risks limit the scope for future cuts and keep rate hikes a low-probability tail risk.​
• Housing and household debt vulnerabilities mean any change in the 2.50% rate will hinge on clearer won stabilisation and a sustained, benign inflation trajectory.