Archive

October 22, 2025
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UK CPI Trips Into The Fall

  • UK inflation’s march higher ended early as expectations tripped over a drop in airfares to slow slightly in September, ahead of slightly falling back through the Fall seasonal.
  • Weakness elsewhere cut the annualised median rate below 2% for the first time since March. That is likely to be a small soft spot relative to the worrying cumulative upside.
  • Our forecasts remain close to or below the consensus until June, after other forecasts rose in last month’s survey. We still see wages stoking an excessive underlying trend.

By Philip Rush

October 17, 2025
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EA: Inflation Rises Briefly In The Fall

  • Inflation’s rise to a high 2.3% in September was confirmed in the final print, although some payback remains likely in October. We doubt it goes fully back to the target then.
  • Underlying inflation metrics were broadly stable again at about 2.5%, with little progress in most statistical measures for over a year.
  • There is little cause for alarm at this stage, so the ECB can keep waiting in a good place, but we still see a greater risk of hikes than cuts in 2026.

By Philip Rush

October 01, 2025
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EA: Core Excess Revealed In Sep-25

  • Inflation’s break above target to 2.23%, within 1bp of our forecast, came as past energy price falls dropped out to reveal the more resilient underlying pressures.
  • Small upside surprises in large countries, like Germany and Italy, were balanced in number and contribution by larger surprises in small ones, like Greece and Estonia.
  • We expect less negative payback in October and January, preventing our profile from languishing below the target through 2026, like the consensus view does.

By Philip Rush

September 17, 2025
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UK CPI Stickier For Longer

  • UK inflation data confirmed the substantial upwards drift in the consensus, worth 0.6pp since May and 1.1pp over the past year, while matching final forecasts for August.
  • The consensus has shifted further than usual over the past month. It now aligns with our hawkish forecast until April, when hope again dominates in dragging inflation down.
  • Although the MPC won’t be shocked by this outcome, the persistent excess in underlying inflation still seems set to keep it holding rates. We do not expect cuts to resume.

By Philip Rush

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