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The rise in UK inflation is uncomfortable for a government which plans to raise it further | Notayesmanseconomics's Blog
This morning has brought some predictable but none the less disappointing news for the UK on the inflation front. Let us start our analysis with the measure that the Bank of England targets. The Consumer Prices Index (CPI) rose by 2.3% in the 12 months to October 2024, up from 1.7% in September. On a…
Japan is seeing labour shortages as its population shrinks but still real wages have fallen | Notayesmanseconomics's Blog
This morning has brought an intriguing development in Japan as we have seen the Japanese Yen rally very sharply from 154.60 to 153.60. The move was like there had been some intervention if we look at the speed and size of it. I doubt that there was explicit intervention but perhaps bodies close to the…
The ECB plans to double down on the policies which have stagnated the Euro area economy | Notayesmanseconomics's Blog
Today sees quite a raft of speakers from the ECB and we have seen two already this morning as they rush to pit their point of view forwards. They can in one sense be positive after this was released last week. In the third quarter of 2024, seasonally adjusted GDP increased by 0.4% in the euro…
UK GDP Growth Disappoints as September Shrinks | Notayesmanseconomics's Blog
This morning has brought some disappointing economic news for the UK. The relatively strong economic growth seen in the first half of 2024 has faded to this. UK gross domestic product (GDP) is estimated to have increased by 0.1% in Quarter 3 (July to Sept) 2024, following growth of 0.5% in Quarter 2 (Apr to…
Chancellor Rachel Reeves will give her Mansion House speech to a back drop of financial market pressures | Notayesmanseconomics's Blog
Today is Mansion House day when the Chancellor in this instance Rachel Reeves gives a keynote financial speech setting out plans for the future.Sometimes the Governor of the Bank of England does so to as I recall former Governor Mark Carney solidifying his reputation as the "unreliable boyfriend" by what he said. These days he…
Yet again we see the prospect of interest-rate cuts in the US disappearing | Notayesmanseconomics's Blog
2024 so far has been a story of interest-rate cuts being some combination of being hinted at and promised and then disappearing as if they had been a mirage, at least in the United States. Yesterday focused investors minds on the danger of that happening again next month. A factor in this came at a…
Is the rise in UK Unemployment a blip or a new trend? | Notayesmanseconomics's Blog
This morning has brought us up to date on the official view on the UK labour market. Whilst there are some good parts there are also some which are more of a mixed bag. Plus we should recall that the data itself is more uncertain these days or as it if officially put. Increased volatility…
China has unveiled a disappointing economic stimulus giving an echo of The Lost Decade | Notayesmanseconomics's Blog
The economic week has started with us again looking East to China as we received on Friday news about the stimulus programme that was announced at the end of September. China has announced a Rmb10tn ($1.4tn) fiscal package to bail out local governments and help shore up its faltering economy, as it braces for increased…
Bank of England Governor Andrew Bailey probably cannot believe his luck | Notayesmanseconomics's Blog
We are in a phase where economic news has picked up and in particular there is much going on in my home country the UK. We can start with an example of that from the Bank of England yesterday. At its meeting ending on 6 November 2024, the MPC voted by a majority of 8–1…
Sweden slashes interest-rates by 0.5% | Notayesmanseconomics's Blog
This morning we have witnessed what is a rare event. That is we have seen an example of Forward Guidance from a central bank being proven to be correct. Admittedly it is for a cut which they are always more enthusiastic about but none the less the world's oldest central bank has backed up talk…
What does the Bank of England do now on interest-rates? | Notayesmanseconomics's Blog
Later on tomorrow the Bank of England will vote on what to do with interest-rates. It finds itself in a slightly awkward position in terms of timing in that it will be voting 24 hours before we find out what the US Federal Reserve has done. In terms of the Bank of England's announcement on…
What are the economic consequences of a victory for President Trump? | Notayesmanseconomics's Blog
This morning we in the UK have woken up to the expectation of a second Presidential term for The Donald as he has 267 of the required 270 electoral college votes as I type this. Along the way it has been a bad election for the MSM as they have pushed the idea of it…
What is the state of the US economy ahead of the election and Federal Reserve meeting? | Notayesmanseconomics's Blog
This week will bring two big pieces of news from the worlds largest economy. First we will have the Presidential election and then we will have the latest decision on interest-rates from the Federal Reserve. The latter is something that we have been debating throughout 2024 as we opened it with Federal Reserve Chair Jerome…
How much can we trust official statistics? | Notayesmanseconomics's Blog
I thought that I would finish the week by looking at a subject I would prefer did not exist. Regular readers will be aware that I have a rule that I accept official numbers until there are really good reasons to challenge them. Sadly that is happening more and more often which should not be…
What are the economic consequences of the UK Budget? | Notayesmanseconomics's Blog
Yesterday was always going to be both a set piece event and a significant one as we had the first Labour Budget for many years. If I may start with my old stomping ground of the UK government bond market there was something that was familiar. Back in the days of Gordon Brown as Chancellor…
Germany returns to economic growth (if you believe the GDP figures) | Notayesmanseconomics's Blog
This morning I think we have seen something of a swerve from the German statistics office. It starts with an announcement that looks rather positive in the circumstances. WIESBADEN – Gross domestic product (GDP) grew by 0.2% in the third quarter of 2024 compared to the second quarter of 2024 – adjusted for price, seasonal…
What are the economic prospects for the UK ahead of the Budget? | Notayesmanseconomics's Blog
We can start today's look at the UK economic situation with some good news. We have seen a further fall in shop prices according to the British Retail Consortium. October saw shop prices fall marginally further into deflation for the third consecutive month. Food inflation eased, particularly for meat, fish and tea as well as…
The Japanese Yen is under a lot of pressure again | Notayesmanseconomics's Blog
There is only one place for us to start the week and it is one where the Rishi Sunak award for calling an early election has been handed out. The LDP and Komeito fell well short of the 233 seats required for a majority, meaning Prime Minister Shigeru Ishiba must find more supporters if he is…
Financial Markets will look at the real UK borrowing numbers not fiscal rules | Notayesmanseconomics's Blog
The new UK Labour government has already been through quite a few changes in its approach to fiscal policy. It may seem hard to believe now but in the election campaign it the soon to be Chancellor Rachel Reeves stated her plans were fully funded and costed. She also stated that big changes were unlikely…
Bank of England Governor Andrew Bailey has seen UK interest-rates rise since he tried to talk them down | Notayesmanseconomics's Blog
As this month has progressed we have seen financial markets move in the opposite direction to the rhetoric from central bankers. We had another example of the latter only yesterday afternoon. Today, we lowered the policy interest rate by 50 basis points. This is our fourth consecutive decrease since June and brings our policy rate…
Is the ECB starting to panic about Euro area economic prospects? | Notayesmanseconomics's Blog
In some ways things were quite simple last week as the ECB cut interest-rates for the Euro area by 0.25% to 3.25%. It was after all what we were expecting. However it did come with something of a change of emphasis highlighted by these words from President Christine Lagarde. The incoming information on inflation shows…
The UK Public Finances are about to enter the political arena | Notayesmanseconomics's Blog
Today has brought us the latest numbers in an area of the economy hat has become something of a political football. The new UK government assured everyone that its fiscal plans were "fully costed and fully funded" and that reforms meant there would be no change in that should it win power. Once it did…
China cuts interest-rates again in an attempt to reverse its property crash | Notayesmanseconomics's Blog
The economic week has opened with further confirmation that the Chinese economy is struggling. China on Monday cut its market-based benchmark lending rates, with the one-year loan prime rate (LPR) down to 3.1 percent from 3.35 percent. The over-five-year LPR, on which many lenders base their mortgage rates, was lowered to 3.6 percent from 3.85…
UK Retail Sales again hint at an economy in good shape colliding with government rhetoric about worst economic inheritance | Notayesmanseconomics's Blog
This morning has brought more economic news continuing the theme of the UK having a better year. Retail sales volumes (quantity bought) are estimated to have risen by 0.3% in September 2024, following a rise of 1.0% in August 2024 (unrevised from our last publication). We can continue the same vibe as we look for…
Who guards our banking guardians? | Notayesmanseconomics's Blog
Today has brought up a stream of themes from my early days on here. You can sum much of it up under the strap line "The Precious! The Precious!". In another link I was watching an episode of Yes Prime Minister earlier this week where the appointing of regulators was going on. There, an absence…
The UK Labour Market looks to be in pretty good shape | Notayesmanseconomics's Blog
Today has brought the latest UK labour market figures and we can start with an area which looks set to become an issue for the new UK government. The UK employment rate (for people aged 16 to 64 years) was estimated at 75.0% in June to August 2024, above estimates of a year ago, and…
UK Inflation falls below target but food prices remain a worry | Notayesmanseconomics's Blog
This morning has continued yesterday's theme of better economic news for the UK as inflation has fallen below the Bank of England's target. The Consumer Prices Index (CPI) rose by 1.7% in the 12 months to September 2024, down from 2.2% in August. On a monthly basis, CPI was little changed in September 2024, down…
The ECB in another U-Turn is set to cut interest-rates on Thursday | Notayesmanseconomics's Blog
Later this week the European Central Bank meets to set interest-rates for the Euro area and yet again we see that its Forward Guidance on the subject is in disarray. Let us start our journey by seeing how it is doing on the inflation front. Euro area annual inflation is expected to be 1.8% in September…
UK GDP returns to growth in August | Notayesmanseconomics's Blog
This morning has brought us the latest official news on the UK economy and it is better news. Monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in August 2024, after showing no growth in July 2024 (unrevised from last publication). So the UK economy returned to growth in August after…
Is ramping stock markets the new establishment game in town? | Notayesmanseconomics's Blog
Today I thought I would look at an issue that central bankers would describe as a Wealth Effect as they smile and look pleased with themselves. We started the early part of 2024 with this being in play in Japan as we saw the Nikkei 225 equity index pass the 1989 highs after taking some…
Are the Reserve Banks of India and New Zealand both behind the times? | Notayesmanseconomics's Blog
The economic year so far has been dominated by expectations of interest-rate cuts. We opened the year with Federal Reserve Chair Jerome Powell hinting at a wave of them. The did not happen and we have had only one albeit of 0.5% last month. Friday's US employment report got people dialing back interest-rate cut expectations…
Chancellor Rachel Reeves is struggling with growth and tax plans as well as borrowing costs | Notayesmanseconomics's Blog
As someone who spent years and indeed decades working in bond markets it is nice to see it make the news. Maybe even a little wider than just the financial press too. Although there is invariably a kicker in that it is usually bad news as in bond yield rises that attract attention. Below is…
Will we ever let house prices fall again? | Notayesmanseconomics's Blog
Today gives us an opportunity to look at the dog that did not bark. Was that not a Sherlock Holmes theme? We can start with the research student presenting the morning meeting at the Bank of England who will have a smile matching this sunny morning in London. LONDON, Oct 7 (Reuters) - British house…
Has anyone been more consistently wrong than Huw Pill of the Bank of England? | Notayesmanseconomics's Blog
We are being spoiled at the moment by the views and opinions coming out of the Bank of England. I say that in the loosest possible terms as Bank of England Governor Andrew Bailey choose the day of the largest rise in the price of crude oil for some time to suggest more aggressive interest-rate…
Bank of England Governor Andrew Bailey U-Turns on interest-rates | Notayesmanseconomics's Blog
This morning has brought an example of one of my themes being brought into play. This time it is the one that Bank of England Governors sooner or later (usually sooner) get around to talking the UK Pound £ down. So here is Governor Andrew Bailey in an interview with the Guardian. In a wide-ranging…
The situation for car manufacturers in Europe looks set to go from bad to worse | Notayesmanseconomics's Blog
A feature of the modern era is the way that things which are predictable are so often presented as a surprise. Today will see several of our themes in play. One of them has been the way that China has been looking to export its way out of its property crisis slow down. That as…
The US Federal Reserve is tilling the ground for another 0.5% interest-rate cut | Notayesmanseconomics's Blog
Yesterday the Chair of the US Federal Reserve went to Nashville Tennessee. Presumably not for the country music as he is a Grateful Dead fan. But he did give a speech on the subject of monetary policy. As we were reminded of the way he uses Nick Timiraos of the Wall Street Journal by the…
In the future will falls in equity markets be made illegal? | Notayesmanseconomics's Blog
We find ourselves opening the week by looking East but this time to Japan, although there is a Chinese nuance. This saga starts in the foreign exchange markets on Friday where in the early hours the Japanese Yen took rather a dive to 146.60. Just as analysts were sending out their explanation of the drop…
Get ready for more interest-rate cuts from the ECB | Notayesmanseconomics's Blog
This week has been one for interest-rate cuts with moves from China, the Czech Republic, Sweden and Switzerland. I was already thinking of the impact of the latter two moves on the likely policy of the ECB especially with the Swiss echoing the Swedes somewhat with this. Further cuts in the SNB policy rate may…
What cautious interest-rate cuts can we expect from the Bank of England? | Notayesmanseconomics's Blog
Today we have the opportunity to look at the thoughts of Bank of England policymaker Megan Greene who gave a speech in Newcastle yesterday. Let me start with he most recent vote on interest-rates. Given this risk, I believe it is appropriate to take a gradual approach to removing restrictiveness. This has motivated my most…