Archive

January 28, 2026
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UK Shelter Costs Coasting

  • The unusual stability of UK house prices is unlikely to last, while rent inflation is set to slow further. We expect the price-to-rent ratio to stabilise here at pre-pandemic levels.
  • Rapid wage increases in the UK’s unbroken regime of excess inflation have eroded the price-to-earnings ratio to its lowest in over a decade, and will probably extend further.
  • Banks have more regulatory space to lend while lower rates feed the affordability of leveraging up, so there are upside inflationary risks to this benign coasting narrative.

By Philip Rush

January 26, 2026
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UK Politics: The Beginning of the End?

  • A post-local election Labour Party leadership challenge remains high, despite Andy Burnham being blocked from standing for parliament in a forthcoming by-election.
  • In this event, whoever prevailed would likely still be beholden to the left within the Parliamentary Labour Party, which markets would not welcome.
  • However, investors might find some solace in a new leader’s likely willingness to move more quickly on closer economic and defence ties with Europe.

By Alastair Newton

January 22, 2026
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UK: Only A Little Less Fiscally Bleak

  • The UK public finances ended 2025 bullishly with cash receipts jumping ahead of forecasts, sending an encouraging signal ahead of January’s critical tax deadline.
  • Tracking a slightly better performance in 2025-26 is unlikely to create a post-pandemic low in borrowing after years of imprudence that relied on restraint rolling ever later.
  • Borrowing should be £30-40bn above the initial forecast for this year, made during the depths of covid doom. Fiscal slippage remains the real rule investors should remember.

By Philip Rush

January 21, 2026
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UK: Inflationary Bump On Slow Descent

  • UK inflation’s rebound reversed much of the recent undershoot, partly because of airfares, and despite the early index date. Seasonal payback will weigh in January.
  • There is little headline news for the BoE since November, while underlying inflation is too strong, supported by the fundamental pressure from excessive wage growth.
  • Our forecast continues to trend above the consensus through the year, which could encourage the MPC to keep rolling back its assumed rate cut, then never deliver it.

By Philip Rush

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