Notayesmanseconomics

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(Shaun Richards) This is the latest in my series of podcasts explaining how economics works in the credit crunch and now virus pandemic era. This week I give my thoughts on:-

You emphasise bond rates when the go above 5%.I take that this is important.But when will the crisis come to fruition? Is it predictable?And will other countries' rates also rising have any effect on the severity of the crisis if/when it comes?

The statements from members of the Bank of England MPC all appeared unfazed by broad money. Are they correct? Why are they complacent with 3.2% inflation in 2027 (at least the six voting in favour of a hold on base rates)? #Podcast

[notayesmanseconomics]

Central banks have added equities to house prices for their target list

In the latter part of this week we have seen three of the world’s major central banks decide that they can turn a blind eye to the inflationary risks provided by the conflict in the Middle East, of which the latest is the Bank of Japan. At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided, by an 8-1 majority vote, to set the following guideline for money market…

[notayesmanseconomics]

France escapes recession but economic growth is very weak

Today I am going to make a brief nod to the car crash made by the US Federal Reserve and simply point out that the rise in the 30-year yield to pre credit crunch highs means they should have raised interest-rates. The reason for that is we have received new data from France this morning where there were concerns about a recession in the first half of 2026. Gross domestic product (GDP) in volume*…

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The Bank of England is looking to close the stable door after the AI equity horse has bolted

Today is Bank of England day as it votes on UK interest-rates later.  So between then and the announcement of the decision at midday tomorrow there is a risk of some being more equal than others. But before we get to that we can note another arena where many of the same policymakers are involved. The Bank of England is probing the rapid growth of exposure to Asian equities among investment banks…

[notayesmanseconomics]

What will happen to US interest-rates tomorrow?

Today the members of the Federal Reserve Open Market Committee will arrive for their meeting to decide US interest-rates and it has become a live meeting. Although in something of an irony not the way intended Markets are pricing in a strong chance that officials will vote to stay on hold, as they have all year, though they’re leaving open about a 1-in-3 chance of quarter percentage point hike,…

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European economic activity and GDP gets a cocaine boost

As we move into a central bank heavy week we can take a look backwards at the Euro area as well as this morning’s economic data. But before we get there the number one article in terms of popularity on the Financial Times website has an economic theme it has missed. The result is that more cocaine is available in Europe today than in the 1980s — often seen as the drug’s heyday — according to the…

[notayesmanseconomics]

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(Shaun Richards) This is the latest in my series of podcasts explaining how economics works in the credit crunch and now virus pandemic era. This week I give my thoughts on:-

What's your view of the dilemma of adherence to the self-imposed fiscal rules against the need to fund defence/infrastructure commitments.

Shaun, I'd be interested in your view of the 10-year gilt yield, nudging 5.1%. How much of this rise is down to the Middle East situation and oil price, and how much of it to Spendy Andy?

I guessed 5% was when it starts to break so we shouldn’t have to wait long. I wonder if we’ll have to have an emergency budget?

The lack of volatility and tight ranges, could be a "hint" that the BOJ has finally realised that their interventions so far have only donated money to a few players - and now they could be on the offer - ready to destroy USDJPY when others start the move down - first time clever intervention ?

[notayesmanseconomics]

Will the better economic news for the UK be derailed by higher mortgage rates?

This week has started with what has been pretty favourable economic data for the new UK government and that theme has continued this morning. Retail sales volumes are estimated to have risen by 1.0% in June 2026. This followed a rise of 1.2% in May 2026 (unrevised from our previous bulletin), and a fall of 0.7% in April 2026 (revised up from a 1.0% fall in our previous bulletin) So we have a rise…

[notayesmanseconomics]

Japan is facing a crisis on several economic fronts

It is time again for us to look east to Nihon the land of the rising sun and earlier today we heard something that is becoming awfully familiar. Japan’s finance minister warned markets that authorities stood ready to take “appropriate and bold action” as the latest flare-up in the Iran war pushed the yen under ¥163 to the dollar for the first time in almost 40 years. In a press conference on…

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UK consumer inflation improves just as energy costs look set to rise again

The new UK government under Prime Minister Andy Burnham has started life with some favourable economic data. This morning’s version of that came from the official inflation figures. The Consumer Prices Index (CPI) rose by 2.6% in the 12 months to June 2026, down from 2.8% the previous month. On a monthly basis, CPI rose by 0.1% in June 2026, compared with a rise of 0.3% in June 2025. So the…

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The new UK government begins with an unfunded tax cut

The economic pace in the UK has really picked up over the past 24 hours and we can start with some egg on the face of the Financial Times which as we noted last Thursday was reporting that it new Shabana Mahmood would be the new Chancellor of the Exchequer. John Healey has been appointed as Chancellor of the Exchequer @hmtreasury On a political side that puts a new spin on his resignation as…

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In the future will all central banks buy equities?

Over the time I have been writing this blog we have seen an extraordinary expansion in the role of central banks and not a little mission creep. For example when lowering interest-rates to what they then considered the lower bound did not work they then embarked on large amounts of bond buying via QE (Quantitative Easing). When that didn’t work they went onto QE-;like or Queasy policies such as…

[notayesmanseconomics]

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(Shaun Richards) This is the latest in my series of podcasts explaining how economics works in the credit crunch and now virus pandemic era. This week I give my thoughts on:-I see the heat and war in Ukraine is pushing up agricultural commodity prices like wheat.  How long is the pass through time from commodity price rises to shop price increases?Also some questions around the latest Bank of England  QE and QT plans.‘dreadful error’ - so you’d have not done QE at all? Counter-factual of the Gilt market totally seizing up is infinitely worse than where we are nowIve never got why Reeves was never challenged about this in Treasury questionsAnd why they issued so many index linked bonds when inflation was zero!

[notayesmanseconomics]

The Bank of England has more and more problems with QE and QT

This morning has brought news on an issue that is usually apart from on here hidden in the shadows. In the Covid pandemic period central banks became Lords of all they surveyed in government bond markets. Along the way they became very popular in establishment circles as these purchases drove bond yields lower and allowed governments to borrow very cheaply and in some cases ( Euro area, Japan and…

[notayesmanseconomics]

The UK gets some better economic news from the likely new Chancellor and GDP

As England fans like me were getting ready to watch the World Cup semi-final we finally found out who was going to be the next Chancellor of the Exchequer. It came from the Financial Times. Shabana Mahmood, home secretary, is set to become Britain’s next chancellor, according to three people briefed on the thinking of Andy Burnham, in a prospective move that has been welcomed in the City. As we…

[notayesmanseconomics]

What did we learn from the Mansion House speeches last night?

Last night brought one of the set piece events in the UK economic calendar where both the Chancellor of the Bank of England and the Governor of the Bank of England speak at Mansion House in the City of London. There have been significant events here in the past including when Governor Mark Carney spoke the words that most contributed to him being called The Unreliable Boyfriend. “There’s already…

[notayesmanseconomics]

China has engineered much cheaper borrowing costs for its exports and production

This morning we have received the latest Chinese trade figures and one piece of data rather stood out. China’s monthly car exports rose past 1mn cars in June, a new record that comes as part of an overall surge in trade that will heighten tensions with partners such as the EU. (Financial Times) This is of course really awkward for the Financial Times as it has been a fervent supporter of the…