Welcome to the Saturday Economist. Here we explore the fascinating world of money, markets, and everything in between. Our expert analysis is dedicated to bringing you the latest news, insights, and analysis on all things economics.
Whether you're a student, a professional, or just interested in economics and financial markets, The Saturday Economist has something for you. Join us as we delve into the complexities of the global economy and uncover the forces that shape our financial world.
Whether you're a student, a professional, or just interested in economics and financial markets, The Saturday Economist has something for you. Join us as we delve into the complexities of the global economy and uncover the forces that shape our financial world.
According to the Times this week, when Rishi Sunak returned from his holiday he had a list of priorities for the second phase of his premiership. Such was the desire for secrecy that each of them was given a code name.
The code name theme for the policy group was trees. Net zero was cedar, education was elm, HS2 was redwood and health was hawthorn. “It’s been quite surreal,” a Downing Street official said. “People keep saying things like: ‘I’ve just got to go into a meeting on elm.” "Off to a session on Dead Wood". "Health is a thorny subject". That sort of thing.
The first of those plans began to emerge this week as Sunak unveiled the result of Project Cedar, a significant watering down of green policies on the route to net zero.
Click to check out the full post in our latest updates ...
The code name theme for the policy group was trees. Net zero was cedar, education was elm, HS2 was redwood and health was hawthorn. “It’s been quite surreal,” a Downing Street official said. “People keep saying things like: ‘I’ve just got to go into a meeting on elm.” "Off to a session on Dead Wood". "Health is a thorny subject". That sort of thing.
The first of those plans began to emerge this week as Sunak unveiled the result of Project Cedar, a significant watering down of green policies on the route to net zero.
Click to check out the full post in our latest updates ...
In latest central bank moves, the ECB raised rates by 25 basis points this week. In the monetary policy statement accompanying the move the ECB stated ...
"Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target."
Markets rallied, a clear indication further rate rises were on hold? Perhaps. Inflation is falling, growth is slowing. The interest-rate hike sparked a backlash from Italy and Portugal. Spain’s deputy premier expressed hope that its tightening push is now done.
Where Are Rates Headed? Bet on Higher for Longer but probable not by much. A further 25 point rise is possible in the U.S. and the U.K. The ECB is indicating the high point in the cycle may well have been reached..
The Fed is more agnostic. “It is certainly possible that we would raise funds again at the September meeting if the data warranted,” Fed Chairman Jerome Powell told reporters last month. “And I would also say it’s possible that we would choose to hold steady at that meeting.”
Andrew Bailey, Governor of the Bank of England was equally enigmatic. "I am not going to judge what the path of rates will be, not least because more than one path may deliver inflation back to target. We will judge what is the most appropriate based on the evidence".
Want to read more? Check out our Friday Forward Guidance
"Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target."
Markets rallied, a clear indication further rate rises were on hold? Perhaps. Inflation is falling, growth is slowing. The interest-rate hike sparked a backlash from Italy and Portugal. Spain’s deputy premier expressed hope that its tightening push is now done.
Where Are Rates Headed? Bet on Higher for Longer but probable not by much. A further 25 point rise is possible in the U.S. and the U.K. The ECB is indicating the high point in the cycle may well have been reached..
The Fed is more agnostic. “It is certainly possible that we would raise funds again at the September meeting if the data warranted,” Fed Chairman Jerome Powell told reporters last month. “And I would also say it’s possible that we would choose to hold steady at that meeting.”
Andrew Bailey, Governor of the Bank of England was equally enigmatic. "I am not going to judge what the path of rates will be, not least because more than one path may deliver inflation back to target. We will judge what is the most appropriate based on the evidence".
Want to read more? Check out our Friday Forward Guidance
Welcome to the Nèijuǎn 内卷 World Economy ... "An economy twisting inward without real progress ...
The world economy is moving toward "Nèijuǎn 内卷 ... a world economy, twisting inward without real progress. World trade growth is slowing. World growth is stagnating. A world which includes the UK post Brexit, European stagnation in the face of energy cost acceleration, China and the U.S. decoupling and a setback for globalization as a cold war mentality returns with an East West axis.
"Guns or Butter" takes in a new meaning as Moscow barters maize for munitions with Pyongyang. China develops BRICS Plus, a new trading block no longer to be Dollar dependent.
Check out the full post here in our latest updates
The world economy is moving toward "Nèijuǎn 内卷 ... a world economy, twisting inward without real progress. World trade growth is slowing. World growth is stagnating. A world which includes the UK post Brexit, European stagnation in the face of energy cost acceleration, China and the U.S. decoupling and a setback for globalization as a cold war mentality returns with an East West axis.
"Guns or Butter" takes in a new meaning as Moscow barters maize for munitions with Pyongyang. China develops BRICS Plus, a new trading block no longer to be Dollar dependent.
Check out the full post here in our latest updates
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UK inflation "may have" peaked according to the latest data. We are not so sure. In the U.S. on the other hand, both headline CPI and producer prices suggest inflation may well have been transitory after all.
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Jeremy Hunt, the new UK chancellor, today scrapped the bulk of Kwasi Kwarteng’s tax cuts 17th October 2022 ....
Jeremy Hunt, the new UK chancellor, today scrapped the bulk of Kwasi Kwarteng’s tax cutsin a desperate effort to calm markets. In an emergency move to rebuild the government’s fiscal credibility, Hunt ripped up the government’s tax and spending plans, putting a wrecking ball through the economic policy of prime minister Liz Truss. Markets responded positively to signs the UK government was finally getting a grip on Britain’s public finances. Gilts and sterling extending the rally after the chancellor ’s morning statement. The 30 year gilt yield trades at 4.39%. Ten year gilts trade at 3.962, it looks like an over reaction. We expect ten year gilts to trade between 4.0% and 4.5% in the final quarter of the year. Sterling trades higher testing the $1.13 level … |
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Not so much the kindness of strangers, just the generosity of old friends ...
The Treasury will have to sell £234 billion of gilts this year. The Bank will have to step in as the buyer of last resort. Nothing Cute about QT. The Old Lady will have to abandon plans to sell off £80 billion of government debt. The Bank held 33% of the £2.4 trillion of gilts in issue at the start of the year, according to the Debt Management Office. Government debt is set to rise by almost £500 billion over the next three years. Government spending plans by "inky blots and rotten bonds sustained. Johnny Foreigner's holdings have slipped below 30%. The Old Lady of Threadneedle street will have to step up. This is no time for The Bank of England to shirk the task and shrink the balance sheet. |
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