UK Economics Update How will the UK government raise defence spending? An increase in defence spending could represent a significant source of extra demand in the UK. But the UK’s weak fiscal position suggests higher defence spending will need to be mostly funded by tax... 26th May 2026 · 6 mins read
Japan Economics Update Could the BoJ lift rates into restrictive territory? The inflationary consequences of the Iran War have made us more confident in our view that the BoJ’s policy rate will climb to a neutral level of around 2% before long. However, the hurdles for the... 26th May 2026 · 5 mins read
US Economics Weekly Fed alert to rising price pressures The hawkish tone of the Fed’s late-April minutes shows it would be ready to demonstrate its inflation-fighting credentials if it felt compelled to do so. We judge this would require a broadening in... 22nd May 2026 · 5 mins read
Canada Rapid Response Canada Retail Sales (Mar. 2026) The 0.7% m/m fall in retail sales volumes in March was not as large as feared amid mixed signs that the surge in gasoline prices weighed on discretionary spending. Regardless, the advance sales values... 22nd May 2026 · 2 mins read
UK Economics Weekly Labour market too weak to generate big second-round effects We have been saying for some time that the current economic backdrop is much less conducive to a long-lasting bout of inflation than it was in 2022. This week’s news only adds to that feeling. As a... 22nd May 2026 · 4 mins read
Japan Economics Weekly Bank of Japan will lift rates to 2% by end-2027 We learned this week that the Japanese economy was in solid shape on the eve of the Iran war. Moreover, the May PMIs suggest that the Bank of Japan’s fears of a steep downturn are unlikely to... 22nd May 2026 · 5 mins read
UK Economics Rapid Response UK Retail Sales & Public Finances (Apr. 2026) The drop in retail sales volumes and the public borrowing overshoot in April highlights the deteriorating growth outlook and fragile fiscal backdrop that will face whoever is in 10 Downing Street. 22nd May 2026 · 3 mins read
Japan Rapid Response Japan Consumer Prices (April 2026) Although inflationary pressures eased in April, they will pick up again before long. Accordingly, we still think the Bank of Japan is likely to resume its tightening cycle sooner rather than later. 22nd May 2026 · 2 mins read
US Economics Update How concerning is the jump in PPI inflation? The acceleration in producer price (PPI) inflation so far this year has been narrower than was the case during the initial stages of the post-pandemic surge, which limits the risk of consumer price... 21st May 2026 · 3 mins read
UK Housing Market Update What would a new PM mean for the housing market? None of the three leading candidates to replace Starmer as Prime Minister advocate an increase in total housing supply, not least due to the fiscal constraints. But Rayner and Burnham may be more... 21st May 2026 · 4 mins read
UK Economics Rapid Response UK Flash PMIs (May 2026) By suggesting that weaker activity may be starting to restrain price rises, May’s Flash PMIs are the third set of figures in three days that suggest the Bank of England does not need to rush to raise... 21st May 2026 · 3 mins read
Australia & New Zealand Rapid Response Australia Labour Market (April 2026) The strong pickup in Australia’s jobless rate in April makes it all but certain that the Bank will leave rates on hold at 4.35% at its June meeting. However, with underlying inflation set to... 21st May 2026 · 2 mins read
Japan Rapid Response Japan Flash PMIs (May 26) The composite PMI suggests that economic activity is softening rather than collapsing, while inflation could soon become as strong as it was after the Ukraine War. 21st May 2026 · 2 mins read
Japan Rapid Response Japan External Trade (Apr. 26) Most of the recent strength in exports reflects soaring export prices, while the closure of the Strait of Hormuz resulted in a record plunge in crude oil imports. T 21st May 2026 · 2 mins read
US Rapid Response US Fed Minutes (Apr 28-29) The minutes from the Fed’s late April meeting were even more hawkish than expected based on the initial post meeting communications, which had been largely unchanged despite some dissents. The most... 20th May 2026 · 2 mins read
Capital Daily Forget the S&P’s 500 valuation, its earnings are flashing red One consequence of the US stock market’s resilience to the recent sell-off in Treasuries has been a decline in the US equity risk premium (ERP). Nonetheless, the US stock market’s relative valuation... 20th May 2026 · 4 mins read
