Archive

September 04, 2025
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BoE Survey Says Inflation Persists

  • CFOs are telling the BoE that they plan to keep raising prices by more than 3% in 2026. The BoE should take notice, as this survey’s previous warnings have proven accurate.
  • Expected increases reflect the passthrough of further wage increases beyond a pace consistent with the target. They exceed even our already hawkish forecasts.
  • The BoE is unlikely to realise the sharp drop in wage growth it expects by year's end, without a shock to break the current regime, bolstering our call for no more rate cuts.

By Philip Rush


September 02, 2025
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EA: Defying Disinflationary Narratives

  • Dovish hopes for EA disinflation continue to be disappointed by resilient outcomes. The rise to 2.1% in August amid sticky core pressures is opposite to the dovish narrative.
  • Euro appreciation’s disinflationary shock is being offset by domestic resilience, which was most surprising in Northern Europe. Our errors were relatively small and balanced.
  • Ongoing upside surprises have defied recent consensus expectations of a drift down to 1.8%. The ECB faces broad upside news that should reassure it against cutting again.

By Philip Rush


August 20, 2025
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UK CPI Trend Extends Excess In July

  • Another upside surprise in UK CPI inflation extended the accumulated drift to 1.3pp over the past year, yet was only 0.2pp above our old call.
  • This outcome matched the BoE’s latest call, with airfares driving the rise, and median pressures holding slightly above a target-consistent pace, so there is less policy impact.
  • The MPC was finely balanced in its support for August’s cut, and this rise will not lead dissenters to support past action, let alone another cut, which we still doubt occurs.

By Philip Rush


August 20, 2025
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EA: Sticky Inflation Survives Euro’s Surge

  • Inflation’s surprise stickiness at 2% was confirmed in the Euro area’s final print, with pressures broad based and slightly above a target-consistent pace in most countries.
  • There has been little progress in inflation’s latent trend or our persistence-weighted measure, despite the Euro’s substantial and sustained appreciation.
  • Without dovish second-round effects, the ECB can look through a potential slowing in headline inflation to a tight labour market and persistent pressures, then not cut rates.

By Philip Rush