Archive

October 29, 2025
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Credit For Inflation

  • Credit and monetary holdings are booming in the UK, enabling consumers to spend their devalued pounds, supporting CPI inflation beyond the target.
  • Falling rates have neutered the refinancing shock, facilitating the affordability of loan demand. Rapid ongoing wage growth further reduces the debt burden.
  • The ECB also sees bullish monetary trends, but they only took it to a good place. The BoE is not in a good place, with policy accommodating above-target inflation pressures.

By Philip Rush

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 16, 2025
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UK: Unseasonably Resilient In Q3

  • Slight growth in August sustains an above trend level of activity and is tracking to a 0.2% q-o-q pace for Q3, matching our forecast and the consensus, but disappointing the BoE.
  • The ongoing slowdown in service sector activity repeats residual seasonality that would leave a trough in two months, but there is slightly more resilience this year.
  • Policymakers shouldn’t react to statistical noise, and are unlikely to amid ongoing excesses in underlying inflation that a stabilising labour market wouldn’t break.

By Philip Rush

October 14, 2025
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UK: Mixed Messages On Labour Market

  • Most narratives can find some support in the latest labour market report, preserving uncertainty that should keep the BoE on hold at least until some clarity emerges.
  • Unemployment has increased (LFS) or stabilised (payrolls), while pay is shockingly resurgent (inc-bonuses), slowing as expected (ex-bonus) or stagnating (private pay).
  • Weakness isn’t as clear as the consensus and press sometimes make out, but concerns aren’t invalidated. We still expect resilience to preserve excess inflation hawkishly.

By Philip Rush

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