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1 week ago | 
think.ing.com | James Smith |Francesco Pesole
Does that mean faster rate cuts? For now, we think it’s unlikely. Yes, three out of nine officials voted for an immediate rate cut this time. Investors may well take that as a hint that the tide is turning on the committee. But past experience has shown that the vote split contains few useful signals. December’s meeting saw a similar 6-3 vote, yet heralded little change in the Bank’s overall stance. The hawks, meanwhile, will also have a beady eye on oil prices.
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2 weeks ago | 
think.ing.com | Warren Patterson |James Smith |James Knightley |Peter Vanden Houte
What’s happened Israel has launched coordinated strikes on Iran’s primary nuclear and ballistic missile facilities, as well as targeting senior IRGC commanders and nuclear scientists. In response, Iran has retaliated with approximately 100 drones aimed at Israeli territory and marking a major escalation in regional hostilities. Israel has declared a state of emergency, framing the strikes as pre-emptive and warning of further operations.
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2 weeks ago | 
think.ing.com | James Smith
The Bank of England is highly unlikely to cut rates this month, but should it? An increasingly bad run of jobs data, which has seen employee numbers fall for 9 out of the past 10 months at an ever-increasing rate, certainly raises the possibility that the Bank needs to speed things up a bit. The hawks at the BoE would point to wage growth, which, despite the material cooling in hiring, has remained stubbornly high. But that is starting to change.
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2 weeks ago | 
think.ing.com | James Smith |James Knightley |Charlotte de Montpellier |Francesco Pesole
Good cuts, bad cuts Alright, kids, what meme best describes how markets are thinking about central banks right now? How about Gru from Despicable Me? If you’ve not heard of him – and I’ll confess I hadn’t - it’s a scene where he’s explaining his faultless plan to steal the moon, only for it to take an unexpected turn mid-way through. Bear with me and let me explain my thinking. That's if it's not already clear from my work of art above... Rate cuts come in two forms.
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2 weeks ago | 
think.ing.com | James Smith
United Kingdom UK GDP fell faster than expected in April, but these figures have been volatile lately owing to tariff frontloading, coupled with some possible issues with seasonal adjustment. After a strong first quarter, a weaker jobs market and economic uncertainty point to more muted growth rates for the remainder of this year April was a disappointing month for the UK economy, judging by the 0.3% drop in GDP across the month. In truth, this isn’t hugely surprising.
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2 weeks ago | 
think.ing.com | James Smith
Job losses appear to be picking up pace A lot has happened in the UK over the past month, but a surprisingly bad jobs report has set off fresh economic alarm bells recently. It showed that employee numbers are falling at the fastest rate outside of the Covid-19 pandemic, since the data began in 2014. These numbers tend to get revised up later, but still, employment is down by more than a percentage point since the end of last year and has fallen in nine out of the last 10 months.
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2 weeks ago | 
think.ing.com | James Smith
The UK jobs market might be turning a corner – and not in a good way. What stands out from the latest hiring numbers is a sharp 109,000 fall in payrolled employees in May. That is the largest monthly fall outside of the Covid-19 pandemic, since the data began in 2014. However, there’s a fairly significant caveat, which is that this data has a habit of being revised up later on. Back in March, we saw a 78,000 fall, which was later revised up to a drop of 35,000.
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3 weeks ago | 
think.ing.com | James Smith
The Chancellor hopes to achieve a similar victory via closer EU ties. The recent deal, which will reduce cumbersome checks on food imports, is a helpful start. But it isn’t a game-changer. And unless the UK pushes much closer to single market and/or customs union membership, which at this stage looks unlikely, any boost to growth will be modest. This task is also complicated by the government’s recent commitment to lowering net migration.
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3 weeks ago | 
think.ing.com | James Smith |James Knightley |Adam Antoniak |Peter Virovacz
Is that your final answer? This week, we aired our very own version of “Who Wants to Be a Millionaire?”. Ok, maybe it wasn’t quite called that. Mainly because we didn’t have a million pounds to give away (maybe next time, ING bosses?). But our central bank webinar did have “50:50”, which, in case you hadn’t realised, is how we economists forecast virtually everything. And it even had a phone-a-friend. Well, it had Carsten Brzeski and James Knightley. And they were both on the phone.
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3 weeks ago | 
think.ing.com | James Knightley |Carsten Brzeski |Chris Turner |James Smith
The Trump administration appears to be powering through on its promise to impose sweeping tariff measures despite recent court rulings contesting their legality, but the form they’re set to take remains deeply unclear. How these developments will feed through into the global economy is yet to be determined, but what we do know is that the uncertainty is taking a toll on consumer and business sentiment, fuelling market volatility, and complicating the work of central bankers.
