Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul><li>The worst services PMIs thawed in November, broadening growth even as averages held steady. Activity in the US services ISM has trended up to exceed the PMI data now.</li><li>A slight fading of stagflationary pressures in the latest US surveys probably balances out in the Fed’s policy trade-off. We still fear that it is easing excessively.</li><li>Rising unemployment rates in the US and UK are concerns not experienced in most of the world. This theme feeds their recent divergence from the global surprise tendency.</li></ul>

The worst services PMIs thawed in November, broadening growth even as averages held steady. Activity in the US services ISM has trended up to exceed the PMI data now.A slight fading of stagflationary pressures in the latest US surveys probably balances out in the Fed’s policy trade-off. We still fear that it is easing excessively.Rising unemployment rates in the US and UK are concerns not experienced in most of the world. This theme feeds their recent divergence from the global surprise tendency.

<ul><li>A surprise rise in EA inflation to 2.2% in November meant October’s long-awaited dip was a false dawn for a disinflationary consensus exceeded by 0.4pp since June.</li><li>The accumulated extent and the increase in service inflation to 3.5% are concerning, but the latest news was narrowly concentrated in Greece, with other errors being minor.</li><li>Stronger underlying momentum into year-end is preventing the January base effects from driving it significantly below target. The ECB’s good place isn’t breaking dovishly.</li></ul>

A surprise rise in EA inflation to 2.2% in November meant October’s long-awaited dip was a false dawn for a disinflationary consensus exceeded by 0.4pp since June.The accumulated extent and the increase in service inflation to 3.5% are concerning, but the latest news was narrowly concentrated in Greece, with other errors being minor.Stronger underlying momentum into year-end is preventing the January base effects from driving it significantly below target. The ECB’s good place isn’t breaking dovishly.

<ul><li>Volatile markets and policy guidance washed out, with pricing and forecasts little changed on the month.</li><li>Bailey is biased to ease, but the BoE is awakening to its inflation problem. It should cut less than dovishly priced.</li><li>Higher unemployment could move beyond a structural shift from policy to signal a less elevated neutral rate.</li></ul>

Volatile markets and policy guidance washed out, with pricing and forecasts little changed on the month.Bailey is biased to ease, but the BoE is awakening to its inflation problem. It should cut less than dovishly priced.Higher unemployment could move beyond a structural shift from policy to signal a less elevated neutral rate.

External broker reports, Nordea

Nordea

External broker reports

External broker reports(aggregated public sources)

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<ul><li>The monetary policyaccountfrom the ECB’sOctobermeeting furthersuggested that the ECB is not close to further changes in its monetary policy.</li><li>While some downside risks have receded, the focus still seems to be on the remaining downside risks, especially from the external sector.</li><li>At the same time, the economy has continued to show resilience.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The monetary policyaccountfrom the ECB’sOctobermeeting furthersuggested that the ECB is not close to further changes in its monetary policy.While some downside risks have receded, the focus still seems to be on the remaining downside risks, especially from the external sector.At the same time, the economy has continued to show resilience.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ECB Watch: More focus on financial stability risks

<ul><li>UK fiscal policy had an even smaller hole to fill than we expected, with the work to fill it in delayed until the election. There is no dovish pressure on the BoE from this.</li><li>European data releases were relatively resilient again, with household lending and business sentiment broadly increasing. National inflation surprises were offsetting.</li><li>Next week’s Euro area flash HICP is still tracking 2.1% in our forecast. Final PMI releases and the BoE’s decision maker panel survey results are our other release highlights.</li></ul>

UK fiscal policy had an even smaller hole to fill than we expected, with the work to fill it in delayed until the election. There is no dovish pressure on the BoE from this.European data releases were relatively resilient again, with household lending and business sentiment broadly increasing. National inflation surprises were offsetting.Next week’s Euro area flash HICP is still tracking 2.1% in our forecast. Final PMI releases and the BoE’s decision maker panel survey results are our other release highlights.

Portugal
Insights on Portugal

Activity Thaws Into Winter

The worst services PMIs thawed in November, broadening growth even as averages held steady. Activity in the US services ISM has trended up to...

Phil Rush

EA: False Dawn For Disinflation

A surprise rise in EA inflation to 2.2% in November meant October’s long-awaited dip was a false dawn for a disinflationary consensus exceeded by...

Phil Rush

HEM: Dec-25 Views & Challenges

Volatile markets and policy guidance washed out, with pricing and forecasts little changed on the month. Bailey is biased to ease, but the BoE is...

Phil Rush

ECB Watch: More focus on financial stability risks

The monetary policyaccountfrom the ECB’sOctobermeeting furthersuggested that the ECB is not close to further changes in its monetary policy.

Nordea

HEW: Slow Shovels

UK fiscal policy had an even smaller hole to fill than we expected, with the work to fill it in delayed until the election. There is no dovish...

Phil Rush