Archive

July 10, 2025
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US Claims Continue To Cruise Calmly

  • Rising continuing claims in recent months have been heralded as a canary warning of belated suffering in the labour market. But the problem is ending before it ever began.
  • US employment growth is still aligned with its long-run average, and the unemployment rate is unchanged on the year. Openings and quits are also steady with averages.
  • The Fed needs excess disinflation to cut, and we believe this won’t materialise. That also avoids demand and policy pressure on the BoE and ECB, helping them hold rates.

By Philip Rush

July 09, 2025
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Labour’s Collapsing Credibility

  • Labour failed to campaign on a platform up to the UK’s structural problems, depriving it of the support to deliver change in its first year. Reform UK now lead most polls.
  • Spending cut U-turns compound the fiscal hole exposed by the slippage of optimistic assumptions, making further tax hikes and more persistent deficits seem inevitable.
  • Far-centrism has been rejected, but challenges to Labour’s right and left break its ability to triangulate back towards success. Investors may not stay so forgiving.

By Philip Rush

July 08, 2025
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Inconsistently Dovish Pricing

  • Dovish market fears from April have unwound for the Fed, yet deepened for the BoE, despite broadly resilient data and cautious guidance from policymakers reluctant to cut.
  • Equity prices have relied on this resilience to recover, yet expectations for extended rate-cutting cycles imply it breaks. Payrolls only forced half of the gap to close.
  • We expect ongoing resilience to keep rolling market pricing for rate cuts later, with the unnecessary easing ultimately never being delivered by the BoE, Fed, or ECB.

By Philip Rush

July 03, 2025
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BoE Surveys Sustain Resilience

  • The Decision Maker Panel and Credit Conditions Surveys remained resilient. Price and wage inflation are stuck at excessive levels, and US trade policy makes little difference.
  • Default rates are falling while the availability and demand for credit are rising to reveal a loosening of monetary conditions. There is no evidence of policy being too tight.
  • Inflation and labour market data matched BoE forecasts from May, when most members were biased to slow easing. Resilient surveys should discourage it from cutting again.

By Philip Rush

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