Inflation to hit 10% before year end The further increases in headline and core inflation in August, and likelihood that they will keep rising, will add to the pressure on the ECB to step up the pace of tightening. The balance of probabilities is shifting …
31st August 2022
Recovery continues to lose steam The official PMIs show a further loss in economic momentum this month as the reopening boost waned and the property downturn deepened. We continue to think the economy will struggle to make much headway during the coming …
Recovery to stall by September Industrial production made another stride towards pre-virus levels in July but the recovery should stall by September. Meanwhile, retail sales are in for a weak quarter despite a decent showing in July, as soaring inflation …
MNB firmly focused on inflation and the forint Hungary’s central bank (MNB) continued with its aggressive tightening cycle today as it raised its base rate by another 100bp, to 11.75%. It’s clear that the MNB is struggling to contain very strong and …
30th August 2022
Some resilience in spending The £1.4bn (consensus £1.5bn) increase in consumer credit in July supports other evidence suggesting that consumer spending is not collapsing, although this is obviously before the big hit to households’ spending power from the …
Not much room left for further tightening The unemployment rate stayed unchanged in July and we do not see much room for further tightening in the labour market in 2022. The labour force shrank by 0.06% m/m in July, but with the adult population shrinking …
Reopening boost to last for a while yet Not only did retail sales rise for the seventh consecutive month in July, the strong size of the increase strongly suggests that the Reserve Bank of Australia will hike rates by another 50bp next month. The 1.3% m/m …
29th August 2022
Powell continues pushback against early pivot Fed Chair Jerome Powell’s keynote speech at Jackson Hole added to the tide of recent Fed speakers pushing back against market expectations that the Fed is close to pivoting toward rate cuts. Nevertheless, as …
26th August 2022
Inflation moderates, real consumption growth still muted The 0.2% m/m increase in real personal spending was a little weaker than we had expected and, as a result, we now expect third-quarter real consumption growth to be 1.6% annualised, whereas we …
Economy holding up better than headline GDP suggests The upward revision to second quarter GDP, to a contraction of 0.6% annualised, from 0.9%, together with the news that real Gross Domestic Income (GDI) expanded by 1.4% in the second quarter, after a …
25th August 2022
Recession now a certainty Although the Ifo Business Climate Index edged down only trivially in August it remained at a very low level consistent with the economy contracting. After expanding by a mere 0.1% q/q in Q2, we think the German economy is heading …
BoK hikes rates, tightening cycle to finish by year-end The Bank of Korea today raised its main policy rate by 25bp (to 2.5%), and further hikes are likely over the next few months. However, with economic growth set to slow in the second half of the year …
Durables dragged down by slump in defence orders The stagnation in durable goods orders in July was principally due to a 50% m/m slump in defence aircraft orders, which are both volatile and not reflective of the strength of private demand. Excluding …
24th August 2022
Composite PMI plunges deep into recessionary territory The further slump in the S&P Global composite PMI for the US to 45.0 in August, from 47.7, leaves it at a level consistent with a deep recession. Based on the historical relationship, it suggests GDP …
23rd August 2022
PMIs not pointing to a recession…yet Even though the S&P Global/CIPS composite flash PMI stayed above the no-change level of 50.0 in August, it probably won’t be long before it joins other indications suggesting that the economy is already in recession. …
PMIs signal recession has begun August’s flash PMIs suggest that the euro-zone economy is now contracting. While price pressures have become less intense in the past few months as global supply chain problems have eased, soaring gas prices and strong …
Bank will tighten policy further Bank Indonesia (BI) hiked interest rates by 25bp to 3.75% today, and the hawkish commentary from the press conference suggests that the Bank will tighten policy further over the coming months. Today’s decision came as a …
Slowdown continues as supply shortages and virus wave persist August’s PMIs indicate a further slowdown in the manufacturing sector as demand slumped even further, while services continue to bear the brunt from the record Covid-19 wave. According to …
PBOC extends lifeline to struggling economy Today’s reductions to both the one-year and five-year Loan Prime Rates (LPR) continue the PBOC’s efforts to support the faltering economy. We expect additional easing to follow in the coming months, but …
22nd August 2022
Abdalla begins with a hold as pressures mount on pound The Central Bank of Egypt (CBE) kept interest rates on hold, at 11.25%, in the first meeting under new caretaker governor Hassan Abdalla but, with pressure mounting on the pound, we still think …
18th August 2022
The Philippines is entering a demographic sweet spot that could provide a big boost to economic growth, but only if enough new jobs can be found for the wave of young people that will enter the workforce over the coming decade. … …
17th April 2015
