Archive

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

July 02, 2025
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ECB Still Squeezed By Unemployment

  • EA unemployment’s rise to 6.3% matched the ECB forecast underlying recent hawkish guidance and narrowly relied on Italy, which offset a broad tightening elsewhere.
  • Unemployment is still broadly lower than a year ago and pre-pandemic. That will not help a disinflationary move along the Phillips Curve, let alone shift it lower.
  • Without a disinflationary surprise, the ECB should not be shocked into a rate cut as it describes the prevailing setting as well-positioned. We still see no more ECB cuts.

By Philip Rush

July 01, 2025
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EA: Calm At The Inflation Target

  • An unsurprising achievement of the 2% target might urge a celebration at the ECB, but it does not demand policy action. Energy price declines can’t be relied upon to repeat.
  • The early consensus forecast was surprised on the upside, but raised by last week’s releases in France and Spain. So, while reassuring, this outcome is not dovish.
  • We expect inflation to stay close to the target, whereas the ECB forecasts a substantial drop below it, while calling policy well-positioned. We still see no more rate cuts.

By Philip Rush

June 30, 2025
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Oil: Revisiting My Forecast

  • Oil supply is projected to outpace demand growth through 2026, leading to rising inventories and sustained downward pressure on Brent crude to below USD60pb.
  • Opec+ output increases, quota disputes (especially with the UAE), and the potential unwinding of voluntary cuts could further flood the market.
  • US shale producers and international oil companies are reducing investment due to lower prices, but current Brent levels are not yet low enough to force significant cuts.

By Alastair Newton

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