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UK GDP and inflation expectations numbers suggest we are mired in stagflation | Notayesmanseconomics's Blog
Today's economic data for the UK opens by rather emphasising yesterday's subject and why Prime Minister Kier Starmer is not only putting more emphasis on economic growth he is rather sidelining his Chancellor Rachel Reeves. Monthly GDP is estimated to have shown no growth in July 2025, following growth of 0.4% in June 2025 and…
A “Budget Board” is not a policy for UK economic growth | Notayesmanseconomics's Blog
This has not been a good week for the UK government and its plans for economic growth. US drugmaker Merck has scrapped a £1bn London research centre and will lay off more than 100 scientific staff, as the industry accuses ministers of making the UK uncompetitive and paying too little for medicines. ( Financial Times)…
The US money supply does not back the case for interest-rate cuts | Notayesmanseconomics's Blog
Over the last week or so we have seen quite a change in the economic data coming out of the US in an area the Federal Reserve looks at closely. Yesterday saw this from the Bureau of Labor Statistics. The economy added 911,000 fewer jobs (or -0.6% of total employment) than initially reported during the…
Argentina faces problems with both trade and financial markets | Notayesmanseconomics's Blog
It is time to take another look at the economy of Argentina, partly because people have been asking me and partly because yesterday brought some developments. Argentina’s stocks, bonds and currency tumbled on Monday after President Javier Milei’s party lost by a landslide in elections for the country’s largest province, ahead of midterm national polls…
Could Japan return to the negative interest-rates and QQE of Abenomics? | Notayesmanseconomics's Blog
Just when we thought that today would be about the French vote of confidence Japan has rather stepped forward. Along the way it has confirmed one of my themes as it received some better economic news. Japan’s economy expanded in the three months through June, the government confirmed in a revised report, as data for…
The Office for National Statistics finally agree I was right to challenge their seasonal adjustments | Notayesmanseconomics's Blog
As we arrive at the end of the week the UK economy has received a welcome boost. Retail sales volumes are estimated to have risen by 0.6% in July 2025, following an increase of 0.3% in June 2025. So a rise and more than expectations. Investing.com -- British retail sales increased more than expected in…
The interest-rate and bond yield falls in China may create another Carry Trade | Notayesmanseconomics's Blog
As this week has progressed with the Western Capitalist Imperialists struggling with rising bond yields China can afford a wry smile. We noted the all-time lows being seen as its benchmark 10 year yield went below 2% as autumn turned to winter last year. Well now it is 1.75% as those invested in Chinese government…
Gold and Silver step forwards in response to all the fiscal deficits | Notayesmanseconomics's Blog
It is time once again to take a look at the situation regarding precious metals and let me open by congratulating Gold Bugs. BREAKING: Gold officially hits $3,600/oz for the first time in history. Gold is now up +33% YTD, more than 3.5 TIMES the S&P 500’s return. ( The Kobeissi Letter) In fact we…
Why are bond yields spiking like this and what are the implications? | Notayesmanseconomics's Blog
Today there is a clear economic topic and we have been on the case for a while now as it has built up. Although in general there has been media silence on the issue as they seem to be like our political class living in a world where interest-rates remain low. We can start in…
The Bank of England has struggled to get mortgage rates lower in spite of Bank Rate cuts | Notayesmanseconomics's Blog
This morning the focus is back on the Bank of England and we cam start with something which will match the new autumnal mood for the weather at least for the research student presenting the morning meeting. “August saw a slight softening in the rate of annual house price growth to 2.1%, from 2.4% in…
How can the UK fix its fiscal problem? | Notayesmanseconomics's Blog
This morning has brought another attempt by the UK government to find a way of raising taxation to help reduce the fiscal deficit it is running. Or rather we are in a phase of the mythical bond vigilantes applying pressure via news like this. Yield on 30-year UK gilts – a benchmark for the cost…
The ECB finds itself under pressure on several fronts at once | Notayesmanseconomics's Blog
As I wrote the headline to this piece I was thinking to myself isn't it always? Then maybe always is a bit overstating it as there was the "Euro boom" of 2017/18, but most of the time. One concern relates to my subject of Tuesday as I increasingly wonder at what level the ECB would…
It is good to hear a Bank of England policymaker worried about inflation persistence | Notayesmanseconomics's Blog
Last night Bank of England policymaker Catherine Mann gave a speech at the Bank of Mexico. So the contradictions start as we wonder how such an enthusiastic climate change warrior made her way to Mexico? That rather feeds into another part of the daily economic news in the UK as the energy regulator Ofgem has…
France is a case of weak economic growth and an inability to cut government spending | Notayesmanseconomics's Blog
This morning has revived a topic that had gone quiet for a while and so let me hand you over to Le Monde. François Bayrou has chosen not to endure political instability but to precipitate it in order to better extricate himself from it. On Monday, August 25, the Prime Minister announced that a vote of…
Why is the ECB planning to speed up the Digital Euro? | Notayesmanseconomics's Blog
This morning has opened with a couple of my themes in play so please put on your seat belts. We can start with the more minor one and we see something I have warned about for a while. WIESBADEN – Gross domestic product (GDP) fell by 0.3% in the second quarter of 2025 compared to…
The UK has an inflation problem again | Notayesmanseconomics's Blog
I am glad that I looked at things in an optimistic light yesterday because the news from the UK this morning heads towards the other end of the spectrum. The Consumer Prices Index (CPI) rose by 3.8% in the 12 months to July 2025, up from 3.6% in the 12 months to June. So we…
UK GDP surprises after strong reported growth for June | Notayesmanseconomics's Blog
This morning has brought us up to date on the UK economy and the headline is good news. UK gross domestic product (GDP) is estimated to have increased by 0.3% in Quarter 2 (Apr to June) 2025, following an increase of 0.7% in Quarter 1 (Jan to Mar) 2025. So if we switch to the…
China again panics over its lack of consumption problem | Notayesmanseconomics's Blog
Today we need to look East again as the main economic news has come from China and it feeds straight into our main economic theme for it. Yet again we see what the economics textbooks see as a strength can have consequences which erode that strength. the Ministry of Finance, together with the People's Bank…
UK Public-Sector borrowing remains a serious problem | Notayesmanseconomics's Blog
After yesterday's disappointing economic news from the UK we can start today with a better headline. Borrowing - the difference between total public sector spending and income - was £1.1 billion in July 2025; this was £2.3 billion less than in July 2024 and the lowest July borrowing for three years. So we have a much…
Some good news for the UK on GDP and Solar Power | Notayesmanseconomics's Blog
This morning has brought some welcome news for the UK as we learn that our official statisticians have been busy and produced this. Overall, the changes in this blue book raise the level of nominal GDP over the time period, with the level now estimated to be 1.5% higher in 2023, where changes have fed…
Japan is in the middle of a soft default via inflation | Notayesmanseconomics's Blog
After looking at China a couple of days ago it is again time to look East to Nihon this time. We can start with the latest economic news. TOKYO -- Japan's economy grew an annualized 1.0% in the April-to-June quarter from the previous three months, according to preliminary government figures released Friday, avoiding a second…
Why have long-term bond yields risen so much? | Notayesmanseconomics's Blog
At the end of last week something happened in my home country the UK which has become familiar in that the bond market came under pressure again. The headline act was towards the longer end as the 30-year yield rose to 5.57%. The UK 30-Year Gilt yield increased by 14 basis points over the week,…
Official UK Labour Market data remains in quite a mess | Notayesmanseconomics's Blog
This morning has brought us up to date on the latest UK employment and labourmarket statistics and the most timely one will have been accompanied by a sigh of relief from HM Treasury and Chancellor Rachel Reeves. The early estimate of payrolled employees for July 2025 decreased by 164,000 (0.5%) on the year, and by…
How can the UK ever reduce its electricity prices? | Notayesmanseconomics's Blog
This morning has brought news that in many ways I consider to be welcome. Scottish wind farms were paid not to produce 37 per cent of their planned output during the first half of this year, as the electricity could not be used locally or moved to where it was needed. ( Financial Times) Not…
Bank of England Governor Andrew Bailey struggles to get his interest-rate cut | Notayesmanseconomics's Blog
Yesterday turned into quite an interesting day at the Bank of England with several implications for the future. On the surface we got what had been signaled by Governor Andrew Bailey on July 14th. The Bank of England is ready to make larger cuts to interest rates if the jobs market shows signs of a…
As the Bank of England gets ready to cut interest-rates this week will it also hint at a reduction in the rate of QT? | Notayesmanseconomics's Blog
Later this week the Bank of England will announce its latest decision on interest-rates as it meets and votes on Wednesday and announces that decision at midday on Thursday. Some food for thought was giving to it by the US employment report on Friday which went as follows. Total nonfarm payroll employment changed little in…
Has UK Chancellor Rachel Reeves created two “Black Holes” in the UK Public Finances? | Notayesmanseconomics's Blog
Today the economic agenda in the UK has been set by the National Institute for Economic and Social Research which has released this. The Government is not on track to meet its ‘stability rule’, with our forecast suggesting a current deficit of £41.2 billion in the fiscal year 2029-30. Substantial adjustments in the Autumn Budget…
Has China devalued its way to higher exports? | Notayesmanseconomics's Blog
It is time again for us to look East and we can start the main driver of these times which is trade. Here is the Financial Times on this morning's figures. China’s exports rose faster than expected last month, official data showed, ahead of the expiry next week of a tariff truce with the US…
What have the Swiss done to upset President Trump? | Notayesmanseconomics's Blog
It is in fact past time for taking a look at the Swiss economy and a particular trigger for looking at it comes from this. Late on Thursday, Keller-Sutter held a “disastrous” phone call with Donald Trump, according to multiple people familiar with the situation. The 30-minute conversation capped more than three months and hundreds…
What are the economic effects of the Trump Tariffs so far? | Notayesmanseconomics's Blog
Today we advance on the next stage of the Trump Tariff era. So we have a take two if you prefer after the excitement of April. One thing we can start with is human psychology because whilst equity markets are lower with the UK FTSE 100 some 0.7% lower that is a minor move compared…
In an odd twist the Bank of Japan should be supporting the Trump push for lower US interest-rates | Notayesmanseconomics's Blog
Last night and this morning have brought a lot of news on the future path of interest-rates as we have heard from the United States and Japan in that order. The evening before the US announcement ( but after the meeting had started) I pointed out this on social media.. Interesting move by the US…
Euro area GDP has been flattered by a French inventory surge | Notayesmanseconomics's Blog
This morning has brought rather a barrage of economic data from the biggest economies in the Euro area. Let us step back a day both for a full series and also because we can start with some good news. GDP registered a 0.7% change in volume terms in the second quarter compared to the previous…
UK food price inflation is creating quite a headache for the plans of the Bank of England | Notayesmanseconomics's Blog
This morning opened with some disappointing news for the research student whose turn it was to present the Bank of England morning meeting. Shop price inflation increased to 0.7% year on year in July, against growth of 0.4% in June. This is above the 3-month average of 0.3%. ( British Retail Consortium or BRC) With…
UK Unemployment rises again as the labour market weakens | Notayesmanseconomics's Blog
This morning has brought more disappointing news from the UK economy and this time from the labour market. The UK unemployment rate for people aged 16 years and over was estimated at 4.7% in March to May 2025. This is above estimates of a year ago, and up in the latest quarter. The Office for…
The UK borrows another “Black Hole” in June | Notayesmanseconomics's Blog
This morning has brought the release of the latest numbers for the UK Public Finances. Borrowing - the difference between total public sector spending and income - was £20.7 billion in June 2025; this was £6.6 billion more than in June 2024 and the second-highest June borrowing since monthly records began in 1993, after that of…
Can anybody think why the Governor of the Bank of England misled Parliament over the UK Bond market yesterday? | Notayesmanseconomics's Blog
Yesterday the Governor of the Bank of England was interviewed by the Treasury Select Committee of HM Parliament. The session was set up like this. MPs may seek to understand the FPC’s view of plans for fast-paced deregulation in financial services, as the Treasury continues to push forward proposals to cut red tape. MPs on…
Will the Bank of England choose output or inflation next month? | Notayesmanseconomics's Blog
This morning has brought us up to date with the latest news on the UK economy and we have a welcome piece of positive news. Retail sales volumes (quantity bought) are estimated to have risen by 0.9% in June 2025, following a fall of 2.8% in May 2025 (revised down from a fall of 2.7%…
The UK continues to be in a cost of living crisis | Notayesmanseconomics's Blog
This morning has brought more disappointing news for the UK on the inflation front. The Consumer Prices Index (CPI) rose by 3.6% in the 12 months to June 2025, up from 3.4% in the 12 months to May. As this is the measure targeted by the Bank of England it means that Governor Andrew Bailey…
The UK electricity supply is in trouble as opposed to the claims of being a green energy superpower | Notayesmanseconomics's Blog
We are increasingly being reminded that past economic growth was reliant on cheaper energy. In the UK that is a particular issue as electricity prices soared but have not fallen back much. The official claim is that this is due to the high price of gas which has two main problems. Why are electricity prices…
Will the ECB cut interest-rates now the European Union has a trade deal with the US? | Notayesmanseconomics's Blog
The last few days have seen quite a few pieces of economic news out of the Euro area. We can start with the latest last night from the meeting between President Trump and European Commission President Ursula Von der Leyen. We have stabilised on a single 15% tariff rate for the vast majority of EU…