Archive

June 25, 2025
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Defence Spending Is Not Stimulative

  • NATO raised its target for defence spending to 5% of GDP, with Spain opting out. This increases pressure for tighter monetary conditions than were otherwise appropriate.
  • Defence spending offers weak growth multipliers, so the policy is more likely to stoke deficits than productivity. Central banks may respond with a more hawkish stance.
  • With debt levels already high, the move risks crowding out other spending and lifting sovereign risk premiums. Bond yields suffer from higher deficits and future rates.

By Philip Rush

June 24, 2025
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Israel/Iran/US: Ten Pointers

  • ‘Events’ over the past four days have underlined how hard it is to forecast with any degree of confidence how the Iran/Israel conflict will unfold. However, and recent headline-driven volatility notwithstanding, the supply/demand equation continues to dominate market thinking on oil.

By Alastair Newton

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