Daily BriefsMacro

Macro: Thailand: Primed for an Upside Surprise and more

In today’s briefing:

  • Thailand: Primed for an Upside Surprise
  • UK: Inflationary Shock Shipped-In Again
  • EA: HICP Summit a Short Climb Away

Thailand: Primed for an Upside Surprise

By Manu Bhaskaran

  • Pre-Pandemic, the Thai economy has been a disappointment for many years. Its high dependence on tourism combined with the restrictions on activity had caused the economy to under-perform its peers.
  • There are now signs that Thailand may deliver a pleasant economic surprise, on the back of growing vaccination rates, revival in global demand and higher infra spending.
  • The main downside risk is political. Thai society is divided and there is growing alienation from, and resentment of, the establishment.

UK: Inflationary Shock Shipped-In Again

By Phil Rush

  • The UK’s inflationary pressure has returned in Oct-21 after a brief lull. Administered shocks drove most of the move, but our surprise mainly was in furniture and transport. 
  • Underlying inflation metrics surprised us by another 0.1pp, reinforcing the 2022 excess but indicating less persistent pressures than a decade ago. 
  • Spot inflation is less relevant to the BoE than the medium-term outlook, signalled by labour market developments.

EA: HICP Summit a Short Climb Away

By Phil Rush

  • EA HICP inflation for Oct-21 was confirmed at a low 4.1% y-o-y, despite some national downwards revisions, while the ex-tobacco index printed within 1bps of our forecast at 108.99.
  • We still see the EA HICP inflation peak at 4.4% for Nov-21, 0.1pp above the current consensus.
  • Most underlying inflation measures increased in line with our forecast. Most are likely to move further above target-consistent levels briefly, but with less persistence and excess than in the UK.

Before it’s here, it’s on Smartkarma