G7 “core” inflation stable, close to 10-year average

G7 annual consumer price inflation fell to 0.2% in January, the lowest since October 2009, but the “core” rate excluding food and energy was unchanged at 1.6% – see first chart. Stable core inflation suggests that deflation worries are overblown. … Read More

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UK money trends still positive, pensioner bonds affecting data

UK monetary trends remain consistent with solid economic growth. Broad money was held back in January by a transfer of funds out of bank deposits into the new National Savings pensioner bonds. Narrow money was less affected by this shift … Read More

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Global real money signalling strong H2 economy

Global growth has recovered since the summer, in line with a forecast based on monetary trends and leading indicators. This forecasting approach now suggests that growth will pull back slightly into the spring before moving higher again in the second … Read More

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UK productivity stagnation extends

Inflationary risks from the UK labour market continue to increase. Today’s statistics show a further decline in labour availability, continued poor productivity performance and rising wage pressures. The unemployment rate fell to 5.7% over October-December, the lowest since 2008 and … Read More

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UK election model: Tory lift arriving too late?

A post in April last year described an economic model of UK voting intentions. This model suggested that the Conservatives would move into a 1-2 percentage point lead over Labour by the May 2015 general election, based on a plausible … Read More

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UK Inflation Report: MPC fudges inflation implication of lower slack

Forecast changes in the February Inflation Report look internally inconsistent. The MPC slashed its near-term inflation forecast to take account of recent commodity price weakness, with the annual CPI change now expected to fall to about zero in the second … Read More

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EM money growth still weak, significant country divergence

Emerging market equities are slightly ahead of developed markets year-to-date but relative monetary trends question whether outperformance can continue. The first chart shows the ratio of MSCI’s emerging markets index in US dollars to its developed markets index, together with … Read More

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Money trends suggesting UK / Eurozone growth convergence

UK monetary trends remain consistent with solid economic growth but are no longer stronger than in the Eurozone, suggesting that the UK’s period of outperformance is nearing an end. The preferred narrow and broad monetary aggregates here are “non-financial” M1 … Read More

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Eurozone money trends still upbeat

Eurozone six-month real money growth continued to strengthen in December, supporting the optimistic view here of economic prospects – see also yesterday’s leading indicator report. The monthly rise in narrow money M1 slowed to 0.3% last month, while the broad … Read More

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US slowing on schedule, monetary trends reassuring

A post in September noted that six-month growth in US real narrow money growth had fallen sharply, suggesting a loss of economic momentum in early 2015. This scenario seems to be playing out: Citigroup’s US economic surprise index turned negative … Read More

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