UK Economics Rapid Response UK Consumer Prices (May 2023) The news that CPI inflation stayed at 8.7% in April (consensus 8.4%, BoE 8.3%) and that core CPI inflation rose again, from 6.8% to a new 31-year high of 7.1% (consensus 6.8%), will have been seen in... 21st June 2023 · 3 mins read
UK Housing Market Focus What will be the damage from 6% mortgage rates? A return to mortgage rates of around 6% for the first time since 2007 guarantees a renewed slump in mortgage lending and a further leg down in house prices. Were mortgage rates to be sustained at that... 20th June 2023 · 15 mins read
Asset Allocation Update European equities: no AI, no party? Since bottoming out late last year, European and US equities have fared comparably in local-currency terms, and European stocks have even outperformed in dollar terms. Looking ahead, however, we think... 20th June 2023 · 4 mins read
Emerging Europe Rapid Response Hungary Interest Rate Announcement (June) 20th June 2023 · 2 mins read
UK Economic Outlook Stagflation nation As the UK’s recent problem of higher inflation and slower economic growth than elsewhere is largely due to the lingering effects of the pandemic and Brexit, we think the UK will probably look like the... 19th June 2023 · 20 mins read
Europe Commercial Property Update Will there be a reckoning for European offices? The latest MSCI data indicate that values in western European office markets have held up better since the start of the pandemic when compared with the US and UK. But given these cities face similar... 16th June 2023 · 4 mins read
Emerging Europe Economics Weekly Poland’s minimum wage hike and FX mortgage ruling The Polish government’s proposal this week to increase the national minimum wage by another eye-watering 20% or so in 2024 means that wage and inflation pressures could prove even more sticky than we... 16th June 2023 · 9 mins read
UK Economics Weekly Growing pains in the gilt, mortgage and rental markets The surge in gilt yields above the level reached after the Truss/Kwarteng mini-budget last September has pushed mortgage rates even higher and illustrates that most of the drag on real activity and... 16th June 2023 · 10 mins read
Europe Economics Weekly Hawkish ECB, weak economy The ECB’s messaging this week was hawkish and suggests that the risks are skewed towards the ECB’s deposit rate rising above our forecast to a peak of 3.75%. Recent data support the Bank’s view that... 16th June 2023 · 6 mins read
Global Markets Update Investors may be underestimating eventual rate cuts How low Fed and ECB policy rates will go, when they are eventually normalised, is at least as important for financial markets as the precise timings of the ends of tightening cycles, in our view. We... 16th June 2023 · 4 mins read
Europe Economics Update Inflation falling but SNB set to hike rates further Policymakers are likely to raise the policy rate by 50bp to 2% next Thursday, despite inflation falling sharply this year. And SNB Chairman Thomas Jordan’s view that Switzerland’s neutral interest... 15th June 2023 · 4 mins read
Capital Daily Fed and ECB to hike in July, but US & EZ bond yields may fall While the ECB and the Fed took slightly different paths this week, we think they will both tighten policy again in July. Nonetheless, we still think government bond yields in the US and the euro-zone... 15th June 2023 · 7 mins read
Asset Allocation Update Another look at the underperformance of Gilts Although we no longer expect Gilts to outperform in local-currency terms, we do think they’re set to hold up better against Treasuries and Bunds over the rest of this year than they have done lately. 15th June 2023 · 5 mins read
Europe Data Response Euro-zone Industrial Production (Apr.) The uptick in industrial production in April was mostly driven by strong growth in Ireland, with many other major euro-zone economies recording a fall in output. We expect industry to struggle this... 14th June 2023 · 2 mins read
UK Data Response UK Monthly GDP (Apr. 2023) The 0.2% m/m rise in real GDP in April, following March’s 0.3% m/m contraction will further raise hopes that the economy will escape a recession this year. But the rise in GDP is not as good as it... 14th June 2023 · 4 mins read
Europe Data Response Sweden Consumer Prices (May) Headline inflation fell back into single digit territory in May, but the underlying rate came down a bit less than anticipated. This suggests there are upside risks to our forecast that the Riksbank... 14th June 2023 · 2 mins read
