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November 19, 2025
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EA: Unsatisfying disinflationary snack

  • Slower food price inflation nibbled the EA rate down to 2.1% in October, while services increased to their fastest pace since April. Labour costs are still rising too fast.
  • Underlying inflation metrics are broadly a bit beyond target, risking a slight overshoot in the medium term, but the median impulse is reassuring, weighed down by France.
  • Energy prices are set to bump inflation around the target in 2026, averaging above the consensus in our view. The ECB would need tightness elsewhere to shift rates, though.

By Philip Rush

November 13, 2025
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UK: Return To Residual H2 Gloom

  • UK GDP disappointed in Q3 at 0.1% q-o-q after the ONS revised away August’s surprise resilience and led it into a slight September fall, setting up for a soft Q4 too.
  • Residual seasonality in service sector growth has reasserted itself on the average post-pandemic path. So statistical stories seem more plausible than fundamental ones.
  • Weakness in labour market activity is more relevant. The hawkish half of the MPC probably needs disinflationary news to support a cut, but the Governor seems swayed.

By Philip Rush

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