- The downturn in the EZ composite PMI was halted by the Olympics in France; only temporarily we think.
- The PMIs point to firming growth in services, while manufacturing is still stuck in recession.
- A big drop in Q2 wage growth seals the deal for a September cut, and helps our call for an October cut.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The PMI is now pointing to Q3 GDP rising by 0.3% quarter-to-quarter, below the MPC’s forecast.
- Falling inflation signalled by the August PMI as both input and output price balances drop.
- Firms are confident to hire again; the MPC will be wary of employment growth in a tight labour market.
Rob Wood (Chief UK Economist)UK
In one line: Activity springs back up again thanks to the Olympics.
Melanie Debono (Senior Eurozone Economist)Global
In one line: Activity springs back up again thanks to the Olympics.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Services boosted by the Olympics; manufacturing is sinking without a trace.
Claus Vistesen (Chief Eurozone Economist)Global
In one line: Services boosted by the Olympics; manufacturing is sinking without a trace.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We expect the MPC to agree in September that QT will continue at a £100B-a-year pace from October.
- The BoE has welcomed increased use of its short-term repo facility as part of a strategic shift…
- ...to a demand-driven reserves system, while small changes to active QT would be fine-tuning.
Rob Wood (Chief UK Economist)UK
- Construction output jumped in June but still fell over the second quarter as a whole…
- ...This is consistent with a drop in construction capex, which accounts for nearly half of investment in GDP.
- The outlook for the sector is bleak; it will remain a drag on growth for the rest of this year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The Bank of Thailand left its policy rate at 2.50% yesterday in another six-to-one split vote…
- …We got this one wrong, but we continue to believe that 50bp of cuts will be made by year-end.
- The MPC is finally worrying about local demand; better late than never, as exports won’t help.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- The only question for September is the size of the Fed move; we still expect 25bp, but hope for 50.
- The downward revision to March payrolls is big, but this tells us very little about the near-term outlook.
- Existing home sales probably bounced in July, but are unlikely to climb much further in Q3.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
REBOUNDING GROWTH AND SLOWLY EASING WAGES
- ...THE MPC WILL CUT IN NOVEMBER AND THREE TIMES IN 2025
Rob Wood (Chief UK Economist)UK
- In one line:Spending is already overshooting Budget forecasts, government borrowing will exceed the Budget forecasts.
Rob Wood (Chief UK Economist)UK
- In one line: Still sticking to our call for Q4 easing, but a September move can’t be ruled out.
Miguel Chanco (Chief EM Asia Economist)Global
- In one line: Still sticking to our call for Q4 easing, but a September move can’t be ruled out.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- In one line: Still believe that cuts are just around the corner.
Miguel Chanco (Chief EM Asia Economist)Global
- In one line: Still believe that cuts are just around the corner.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia