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October 16, 2024
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UK Inflation Hits Its Bouncy Bottom

  • Surprisingly soft UK inflation data extended across the headline and conventional core metrics, partly because of substantial payback in airfares after August’s surge.
  • Only a slight unwind in October and ambiguous historical precedents for November mean much of this downside persists. However, other underlying signals were resilient.
  • The BoE can focus on this downside news and cut in November. Ultimately, signals for the underlying pressures in the cyclically tight UK economy should urge an early pause.

By Philip Rush

October 10, 2024
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US CPI Extends Hawkish Narrative

  • An upside CPI inflation surprise has joined upside news on the US labour market. It resisted dis-inflated expectations despite sharp falls in energy prices.
  • Core strength was more pronounced and not reliant on shelter price inflation, which it exceeded by the most since Feb-22. Nor does strength reflect residual seasonality.
  • Repeating 2022-23’s pattern would mean a softer Q4, helping the Fed to cut again in November and December before more robust numbers in Q1 start urging restraint.

By Philip Rush

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