UK inflation report: small hawkish shift

Here’s a productivity-enhancing suggestion for students of the Bank of England’s Inflation Report. To deduce the policy message, ignore the copious verbiage and focus on a single statistic – the mean forecast for inflation in two years’ time based on … Read More

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US / UK labour cost pick-up opening door to rate rises

The best measure of US average wages is the quarterly employment cost index (ECI), which adjusts for job shifts between occupations and industries. Annual growth in ECI wages rose to 2.5% in the first quarter of 2015, the fastest since … Read More

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Why aren’t confident UK consumers rewarding the Tories?

British electors, on the face of it, are an ungrateful bunch. Consumer confidence, as measured by the EU Commission / GfK monthly indicator, is at the top of its range over the last 40 years – in the 96th percentile, … Read More

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Monetary signals strongest for US / Eurozone

Narrow money trends last autumn predicted that the Eurozone and Japanese economies would regain momentum while the US and China would slow, a shift confirmed by recent coincident data. Current monetary trends suggest that the US and Eurozone will grow … Read More

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Eurozone news still surprising positively

The ECB’s April bank lending survey, released today, provides further confirmation of a strong economic pick-up. Credit demand, in particular, is surging: the net percentages of banks expecting increased demand for corporate and house purchase loans over the next three … Read More

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Eurozone news still surprising positively

The ECB’s April bank lending survey, released today, provides further confirmation of a strong economic pick-up. Credit demand, in particular, is surging: the net percentages of banks expecting increased demand for corporate and house purchase loans over the next three … Read More

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Brighter Japanese outlook no thanks to QE

Japanese monetary trends continue to signal respectable economic performance but are less strong than in the Eurozone and US, despite record QE. Narrow money M1 and broad money M3 rose by 0.3% and 0.2% respectively in March. Six-month growth rates … Read More

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Global growth: reculer pour mieux sauter

A post in February suggested that global growth would pull back into mid-2015 before strengthening significantly in the second half of the year. This scenario remains on track judging from monetary trends and leading indicators. Global growth is proxied here … Read More

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UK money trends satisfactory, wage income growing strongly

The Bank of England’s preferred broad money measure, M4 excluding intermediate other financial corporations, rose by only 0.1% in February, following an identical January gain. This sluggishness probably reflects savers switching from bank deposits into National Savings pensioner bonds* and … Read More

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Positive Eurozone money signals vindicated and are still positive

Posts here from the summer onwards argued that faster Eurozone monetary growth, particularly of the narrow M1 measure, was signalling notably better economic performance in early 2015. The monetary signal was starkly at odds with consensus gloom, including recession warnings … Read More

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