Archive

BNM: Flexibility Amid Global Bifurcation

• BNM kept its OPR at 2.75%, in line with the consensus. Benign inflation and solid growth justify a steady near-term rate path.
• With inflation anchored near 2% and growth resilient, policy stays neutral, preserving flexibility rather than signalling a clear hike or cut bias.
• Future rate moves hinge on tariff and global inflation risks. Shocks to trade or prices could shift BNM from a prolonged hold to recalibration.

UK: Inflationary Bump On Slow Descent

• UK inflation’s rebound reversed much of the recent undershoot, partly because of airfares, and despite the early index date. Seasonal payback will weigh in January.
• There is little headline news for the BoE since November, while underlying inflation is too strong, supported by the fundamental pressure from excessive wage growth.
• Our forecast continues to trend above the consensus through the year, which could encourage the MPC to keep rolling back its assumed rate cut, then never deliver it.

By Philip Rush