Rising bond yields, resilient manufacturing

We doubt that the increase in sovereign bond yields this week is the beginning of sustained rise in borrowing costs, even if the headline inflation rate rises further. Meanwhile, we are looking forward to the breakdown of January’s HICP inflation data next week for more evidence of how much of the increase was due to temporary factors. We will also be hosting a twenty-minute “drop-in” conversation about the inflation outlook following the final HICP inflation data release on Tuesday. The session is at 15.00 GMT and you can register here.