UK
Weak UK employment and easing inflation reinforce the case for further BoE cuts. Payrolls fell by 11k in January, while the unemployment rate rose to 5.2% when steadiness was expected. Average weekly earnings slowed to 4.2% y/y from 4.6%, and the BoE’s…
UK December hard data surprised to the downside, reverting to tepid growth and reinforcing the case for further BoE easing. Industrial production fell 0.9% m/m, slowing to 0.5% y/y from 2.3%. Services were flat on a three-month sequential basis, while…
The Bank of England held rates but struck a dovish tone. The Bank of England held rates at 3.75%. The MPC voted a narrow 5-4 to hold, with Governor Bailey casting the deciding vote. Bailey nonetheless sent dovish signals ahead of the March meeting, noting the…
Recession risks in the UK are clearly rising. In this Special Report, we unpack why labor market deterioration, falling wage growth, and normalizing inflation support deeper BoE cuts ahead. We then discuss how to position across gilts, the pound, and UK equities.
Stay overweight UK gilts and favor GBP 2-year/10-year steepeners as fundamentals remain weak and financial conditions restrictive. Recent strength in UK economic data reflects pent-up demand rather than underlying improvement. Manufacturing rebounded after…
January flash PMIs point to better, though unspectacular, global growth momentum. Developed markets PMIs showed improvement in global growth momentum. PMIs have largely moved sideways through 2025, with manufacturing now recovering after trade uncertainty and…
Stay overweight UK gilts and favor GBP 2-year/10-year steepeners as weak fundamentals keep the BoE on an easing path. UK employment data for November and December were weak, confirming the recent labor-market slowdown. Payrolls fell by 43k, more than…
Overweight UK gilts and favor GBP 2-year/10-year steepeners as stronger November data reflect pent-up demand, not a shift in the weak UK outlook. UK hard activity data for November surprised to the upside. Industrial production rose 1.1% m/m after a 1.3% gain…
Our Global Fixed Income strategists maintain an above-benchmark duration stance as labor market risks continue to support downside yield potential, even as the global easing cycle winds down. With policy normalization largely complete, monetary policy is…
Stay long September 2026 Euribor futures and overweight UK gilts, as Europe could see reflationary cuts while the UK slowdown argues for deeper easing. The ECB left rates unchanged at 2% in a routine meeting and revised its growth and inflation forecasts…