Daily Brief Macro: BoE Trims QT To Hold Policy Steady and more

• The MPC unsurprisingly held rates while seeking an answer to its key question around inflation risks amid elevated expectations and a possible structural shift.
• It also trimmed QT by £30bn to £70bn, keeping active sales of long gilts steady in the next three quarterly auctions while skewing QT towards short and medium gilts.
• We still expect the MPC’s presumption of rate cuts resuming to fade out in early 2026 as hawkish pressures persist. Some offsetting fiscal space arises from QT being trimmed.

• Supply-Constrained asset: Mine output is growing <1% CAGR and recycling is flat, leaving gold’s supply side structurally inelastic.
• Demand shifting institutional: Jewellery’s share is falling below 30% by 2030, while central banks and ETFs could account for ~70% of demand.
• Macro-Driven pricing: Gold trades as a reserve asset, with real rates setting the ceiling — scenarios range from $2,800/oz (bear) to $7,500/oz (bull).

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• Weather related disruption resulted in spike in prices
• Despite some restocking Tire makers remind cautious
• Market expects rebound in Chinese buying ahead of the September peak tire production period

• The Norges Bank cut rates 25bp to 4% as expected, but signalled slower easing than June projections, revising the rate path 20-40bp higher across 2026.
• Committee projects one rate cut annually for three years to a terminal rate above 3% by 2028, reflecting stronger growth and persistent inflation pressures.
• The decision balances economic support with anti-inflation credibility amid trade uncertainty and 4.5% wage growth expectations, constraining future cuts.