James Smith

London

Market Economist and Contributor at ING Think

Economist at @ING_economics

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Articles

THINK Ahead: Imagine what could go wrong…

6 days ago | think.ing.com | James Smith |James Knightley |Adam Antoniak |Valentin Tataru

What could go wrong? Folks, let me tell you, it’s huge. A biggly, very beautiful thing, announced just this Thursday. Some great people from great nations involved. Tremendous numbers, some say the best numbers we’ve ever seen; it’s incredible. I’m referring, of course, to the latest ING Monthly, hot off the press this week, containing all our new forecasts. Here are the headlines:No US or eurozone recession, though both are headed for stagnation.
The UK is relying on EU trade reset to bolster its public finances

1 week ago | think.ing.com | James Smith

The UK is seeking to secure a number of deals Trade deals are like buses. You don’t see one for weeks, then two – maybe even three – come along at once. The UK and India have, after years of talks, agreed a deal that will reduce tariffs for some UK-made goods in exchange for tax concessions on Indian workers moving to Britain, amongst other things.
Why the UK-US trade deal won’t herald a wider tariff climbdown

1 week ago | think.ing.com | James Smith |James Knightley |Inga Fechner

The UK-US deal offers Britain much needed relief from sectoral tariffs President Trump has revealed that the UK is the first country to receive carve-outs from some – though crucially not all – of the tariffs he has introduced over recent months. At face value, the UK seems to have done quite well – at least relative to the reports circulating in recent days. According to the UK’s press release, tariffs on British steel and aluminium go to zero, with no talk of quotas.
What markets are getting wrong about the Bank of England

1 week ago | fxstreet.com | James Smith

The Bank of England is poised to cut rates at its 8 May meeting, and markets are pricing a faster pace of easing thereafter. We're less convinced the Bank will deviate from its once-per-quarter cutting rhythm, but we do think it could cut rates to a lower level than investors are currently expecting. Will the Bank of England be forced to pick up the pace of rate cuts? Markets certainly think so. Having so far cut rates once per quarter, investors are pricing three cuts at the next four meetings.
Sweden’s Riksbank to keep rates on hold; June cut remains possible

1 week ago | think.ing.com | James Smith |Francesco Pesole

The Riksbank could be pressured into one more cut in June Sweden’s Riksbank told everyone back in March that its rate-cutting cycle was likely finished. But with US tariffs now in place and given everything that’s unfolded since, we think the Riksbank will probably be forced to go back on its word. Admittedly, that is unlikely at the 8 May meeting, where we expect policymakers to keep rates at 2.25%. But we’re leaning towards one final rate cut in June.
THINK Ahead: Europe loves a lever, and has plenty of pulling power

1 week ago | think.ing.com | James Smith

How Europe is better placed to deal with Trump's tariff storm Here’s a mind-blowing statistic: April saw the smallest monthly change in the S&P 500 in almost two years. It fell by just 0.8% between the start and the end of last month. Ten-year US government bond yields, meanwhile, were down just six basis points. If only April could have been more exciting, guys? Yes, yes, obviously I am cherry-picking dates here; heaven forbid an economist would do such a thing.
What markets are getting wrong about the Bank of England

1 week ago | think.ing.com | James Smith

What we expect from the Bank of England's May meeting An 8-1 vote in favour of a 25bp rate cut (one member voting for a 50bp cut). No change in forward guidance. Bank to reiterate that future cuts are likely to be "gradual and careful". Cuts to the Bank's 2025 inflation forecast on lower energy prices and upgrades to 2025 GDP growth given the better run of data in 1Q. No major changes to the medium-term outlook.
THINK Ahead: How to (not) spot a recession

2 weeks ago | think.ing.com | James Smith |James Knightley |Adam Antoniak |František Táborský

How (not) to spot a recession What’s the probability of a recession? It’s a question we’re getting asked a lot, which is ironic really, given that we economists are famously… not very good at predicting recessions. That thing about “predicting nine out of the last five” is probably being generous. So it might surprise you that I’m not about to predict the tenth. Recession isn’t our team’s base case on either side of the Atlantic, though I think we’d concede it’s not a high-conviction call.
THINK Ahead: The IMF’s high wire act

4 weeks ago | think.ing.com | James Smith |James Knightley |Bert Colijn |Adam Antoniak

THINK Ahead It’s been six months since the great and the good of the finance world last met in Washington to chew on lukewarm canapes and sip decidedly average Champagne. I’m talking about the IMF’s annual meetings and, yes, maybe I’m still slightly bitter that I didn’t get the invite…Back then, the talk of the town was Donald Trump, whether he would win November’s election, and if he did, what would come first: tax cuts or tariffs? Well, I think we have our answer.
UK inflation set to rise this year despite lower-than-expected March data

1 month ago | think.ing.com | James Smith

At 2.6%, March’s headline UK inflation reading is likely to be the lowest we’ll see for some time. Household energy bills have generally been a net drag on overall inflation, a legacy of the steep falls in natural gas prices we saw after the 2022 spike. But as of April, that will no longer be the case. Those energy bills will be contributing 0.8ppt more towards April’s annual CPI figure than they did in March. Water bills have risen sharply this month, too.