Strong across the board The strong 83,100 rise in employment and the dip in the unemployment rate in June suggests the labour market is in better shape than we had feared, despite ongoing uncertainty around Canada’s trade relationship with the US. While …
11th July 2025
This page has been updated with additional analysis since first publication. Hangover continues, but signs of a recovery building The hangover from the burst of activity in Q1 ahead of rises in US tariffs and UK stamp charges continued in May with GDP …
Tightening cycle probably over, but currency now the key risk There’s little in the Brazilian June CPI print that changes our view that last month’s hike marked the end to Copom’s tightening cycle. But a lot will now depend on how the trade dispute with …
10th July 2025
The Bank of Korea rarely cuts interest rates at back-to-back meetings, and the decision to leave interest rates on hold today at 2.50% comes as no surprise. The announcement was correctly predicted by all 33 analysts polled by LSEG, including ourselves. …
Fed in wait-and-see mode The minutes of the mid-June FOMC meeting show most Fed officials content to wait and see what impact tariffs and other government policies had on inflation and the labour market before committing to either holding rates or cutting …
9th July 2025
More rate cuts coming, but in smaller steps The fall in Mexico’s headline inflation rate, to 4.3% y/y in June gives Banxico room to continue its easing cycle in the coming months. But with inflation still above target and core inflation rising, we think …
Disinflation resumes and paves the way for CBE to continue loosening cycle Egypt’s headline inflation rate slowed from 16.8% y/y in May to 14.9% y/y in June amid a broad-based easing of price pressures and supports our non-consensus view that the Central …
Activity (very slowly) on the mend The rise in purchase mortgage applications in June supports our view that transactions will pick up in the second half of the year, even if they remain depressed by historical standards. Seasonally-adjusted mortgage …
First cut of the cycle – more to come Bank Negara Malaysia (BNM) today cut its policy rate by 25bps, to 2.75%. With growth likely to slow and inflation set to remain contained, we think further easing lies in store. Today’s cut was predicted by just over …
RBNZ pauses easing cycle, but signals more cuts are coming While the RBNZ predictably left rates on hold today, it signalled that it was likely to loosen policy further as long as capacity pressures continued to ease. The RBNZ’s decision to leave the …
This page has been updated with additional analysis since first publication. Rebound in core inflation likely to be short-lived Headline inflation came out of negative territory last month, with core inflation rising to its highest level in over a year, …
NBR leaves rates on hold with inflation poised to rebound The communications accompanying the decision by the National Bank of Romania (NBR) to leave its policy rate on hold, at 6.50%, suggest policymakers are concerned about the inflationary impacts of …
8th July 2025
Downside inflation surprise paves the way for rate cut later this month The larger-than-expected fall in Chilean inflation, to 4.1% y/y, in June supports our view that policymakers will resume its easing cycle with a 25bp cut, to 4.75%, later this month. …
RBA still likely to cut rates much further The Reserve Bank of Australia defied widespread expectations of a rate cut at today’s meeting, but we still expect the Bank to cut rates by another 100bp over the coming year. The Bank’s decision to leave the …
President Donald Trump has now released “letters” to 14 countries today, announcing that, unless they negotiate a deal over the next few weeks, he will impose reciprocal tariffs on those countries from August 1 st . In most cases, those tariffs that would …
7th July 2025
President Donald Trump has released the first of his “letters” threatening to impose country-specific tariffs of 25% on both Japan and South Korea from August 1 st , if those countries can’t reach a deal with his administration by then. Back in April, …
BoI leaves rates on hold, but cuts coming a little sooner The slightly more dovish communications accompanying the decision by the Bank of Israel (BoI) to leave its policy rate on hold today, at 4.50%, and the easing in geopolitical risks, suggest that …
This page has been updated with additional analysis since first publication. House prices still struggling to regain momentum The stagnation in the Halifax house price index in June suggests that the housing market remains slow to recover from both the …
Jump in inflation will discourage Riksbank from further cuts Both headline and core inflation rose in June by much more than Riksbank officials had forecast at its meeting last month, supporting our view that the Riksbank will keep the policy rate at 2% …
Output still resilient to tariffs The better-than-expected German industrial production figures for May are partly due to continued tariff front-running in the pharmaceuticals sector, but output in other sectors is also proving more resilient to tariffs …
Wage growth should pick up across second half The slump in wage growth in May largely reflected a plunge in volatile bonus payments and we still expect base pay growth to accelerate further. According to the preliminary estimate, wage growth slowed from …
Construction activity improves on back of housing market The headline CIPS construction PMI rose for the fourth consecutive month in June to 48.8, a six-month high. The increase was driven by the housing component, which jumped from 45.1 in May to 50.7 in …
4th July 2025
Lift in household spending not as strong as it seems The strong pickup in household spending in May is likely overstating the momentum behind private consumption. As a result, we don’t think it will stand in the way of the RBA loosening policy settings …
Service sector not firing on all cylinders, but holding up The rebound in the ISM services index in June is broadly consistent with our view that economic growth will slow rather than collapse in the second half of the year. While the prices paid index …
3rd July 2025
Exports weaker than they look While the headline export number for May shows significant improvement from a grim April, this was mostly driven by volatile gold exports, where non-mineral product exports declined in the month. Exports to the US continued …
This page has been updated with additional analysis since first publication. Labour market healthy but gains again narrow The 147,000 gain in non-farm payrolls in June was reassuring after the fall in the ADP measure of employment reported yesterday. A …
Gulf non-oil sectors end Q2 on a stronger note, but weakness ahead June’s batch of whole economy PMIs showed a strong outturn for the Gulf’s non-oil sectors despite the coinciding escalation of the Iran-Israel conflict. Tensions have since eased, but …
Soft inflation print points to July rate cut The larger-than-expected fall in Turkish inflation in June, to 35.0%, supports our view that the central bank will restart its easing later this month. We maintain our forecast for the one-week repo rate to be …
This page had been updated with additional analysis. Inflation rises, but will remain very weak this year Headline inflation rose slightly in Switzerland in June, but we expect it will remain around zero, or just below, for the rest of the year. …
NBP cuts by 25bp, with two further cuts likely this year The decision by the National Bank of Poland (NBP) to cut its policy rate by 25bp today, to 5.00%, was a dovish surprise to most analysts (although not ourselves). With inflation likely to fall back …
2nd July 2025
Weak retail sales print locks in July cut for RBA With consumer spending remaining in the doldrums, there is a strong case for the RBA to cut rates faster and further than most are predicting. The 0.2% m/m rise in retail sales in May was markedly weaker …
Tariff cost pressures are still working their way through supply chains The modest rebound in the ISM headline index to 49.0 in June, from 48.5, should temper concerns of a factory sector collapse driven by tariffs and lingering trade uncertainty. While …
1st July 2025
Inflation at the target and likely to remain quite stable The small increase in headline inflation in the euro-zone in June will not change the debate among ECB policymakers about whether there should be one more interest rate cut in the current cycle. …
Warning signs for industry at the end of Q2 The weak batch of June manufacturing PMIs out of Emerging Europe – and in particular some of the forward-looking components of the surveys – paint a downbeat view for industrial activity across the region. That …
We’ll be discussing how the government has influenced the UK economy in its first year in office in a 20-minute online Drop-In on at 3pm BST Thursday 3 rd July. (Register here . ) This page has been updated with additional analysis since first …
Firms are shrugging off trade tensions The Q2 Tankan survey showed that the economy is holding up well despite trade tensions, which supports our view that the Bank of Japan will resume its tightening cycle before the end of the year. The Tankan’s …
June inflation figures will please ECB National data published so far suggest that both euro-zone headline and core inflation were little changed and close to 2% in June. That will please ECB officials, who we expect to cut rates one more time in this …
30th June 2025
Net lending to property gains momentum Net lending to property had another strong month in May, with the total of £2.15bn the largest amount in five years. That was primarily due to a rise in lending to standing developments, which surged to £2bn from …
This page has been updated with additional analysis since first publication. We’ll be discussing how the government has influenced the UK economy in its first year in office. Register for in-person Roundtables at our London office on Tuesday 1 st July …
Rate cut still on the cards on Wednesday The small rise in Polish inflation, to 4.1% y/y, in June is likely to be followed by a fall back within the central bank’s target range over the second half of this year. We think this will give the National Bank …
Japanese firms not benefitting from trade war after all The subdued rise in industrial production in May means that firms were not benefitting from sky-high US tariffs on Chinese imports and their production forecasts point to continued weakness. The 0.5% …
Consumer resilience beginning to fade The rise in core PCE prices in June was partly due to a rise in core goods prices, but the early impact of the tariffs has been unexpectedly muted. Meanwhile, the contraction in real consumer spending last month, …
27th June 2025
Manufacturing slump points to weak second quarter The worse-than-expected 0.1% m/m contraction in GDP in April and equivalent sized estimated fall in May suggests that growth was flat at best in the second quarter, with a clear risk of a contraction. This …
CEE generally resilient, with some weak spots The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional economic activity has been resilient in Q2, although there remains some points of concern – …
Activity weak and some signs of tariff drag The ESI for June suggests that US tariffs may be starting to drag on euro-zone activity and that the economy remains weak. Meanwhile, Middle-east tensions do not appear to have raised perceived uncertainty. The …
Inflation overshoot points to year-end rate hike The slowdown in headline inflation in Tokyo in June partly reflects the resumption of energy subsidies. With underlying inflation still running well ahead of the Bank of Japan’s forecasts, we still expect …
Banxico cuts by 50bp, but tone slightly less dovish Mexico’s central bank (Banxico) lowered its policy rate by another 50bp, to 8.00%, at today’s meeting, but the accompanying communications were slightly less dovish and point to a slower pace of easing …
26th June 2025
Qatar Airways-Boeing deal steals headlines but underlying data positive The surge in durable goods orders in May was mostly driven by the Qatar Airways-Boeing deal announced during President Trump’s visit, but the small rise in core orders shows there …
Inflation eases, Copom’s tightening cycle over The fall in Brazil’s headline inflation rate to 5.3% y/y in the first half of June reinforces our view that the central bank won’t push through further interest rate hikes. An easing cycle is likely to begin …
