UK GDP Preview (May 14): March GDP Drop Expected, Correction or Fresh Trend?

May 5, 2026 10:16 AM UTC

Before the outbreak of the Iran War there was already a split within the MPC about the policy outlook and that such divisions may have been accentuated by the much stronger than expected February GDP update which showed a m/m rise of 0.5%, the strongest in 14 months.  This is likely to have been ab

BoE Review: MPC Playing Its Cards Safely (For Now)?

April 30, 2026 12:29 PM UTC

Very clearly, the BoE kept rates on hold with the MPC last month and the same decision was both expected and delivered this time around but with only token fresh dissent, with Chief Economist Pill wanting an immediate hike from the current 3.75%.  But splits were more evident in the individual MPC

UK Political Risk – Bad Things Come in Threes?

April 29, 2026 12:12 PM UTC

The biggest set of elections since the 2024 general election takes place on 7 May in the UK.  Already, UK markets are fretting about the possible outcome, in particular that serious electoral damage to the Labour Party currently running the government could make it swing more to left and dilute fis

Continuum Economics Calendar May 2026

April 29, 2026 11:00 AM UTC

Data and Events Calendar May 2026.

Straits of Hormuz Standoff and Mixed Markets

April 27, 2026 9:02 AM UTC

•    Equities longer time horizon means that they are hoping for a reopening of the Straits of Hormuz (though also being helped by renewed AI optimism), whereas government bond markets actually want to see tangible progress and an associated tempering of DM central banks posturing.  This dive

BoE Preview (Apr 30) Divided Again But Unmoved (For Now)?

April 24, 2026 9:34 AM UTC

Very clearly, the BoE kept rates on hold with the MPC unanimous last month and the same decision is expected this time around but with probable fresh dissent, with up to 2-3 members opting for an immediate hike.  These splits will be even more evident in the individual MPC member statements (as exp

Iran Conflict – Who Has the ‘Trump’ Card

April 22, 2026 9:17 AM UTC

When Trump aspires to reaching a deal, he thinks in either black or white.  But whether it be political, economic or military the reality is that the world is always various shades of grey.  This is very much evident in the way the Iran conflict was planned by the U.S. – the expected clear and r

UK CPI Review: Inflation Being Fuelled But Wages Still on the Wane?

April 22, 2026 6:35 AM UTC

What are energy induced price rises are now very evident, most notably in PPI data as well as the more closely watched CPI figures. Thus after a stable 3.0% (a 10-mth low) February’s headline – matching the consensus, headline CPI jumped to 3.3% in March.  Services, however, rose from 4.3% a fo

UK Labor Market: Lower Jobless Rates Misleading, as Wage Pressures hit New Cycle -Low

April 21, 2026 6:54 AM UTC

There are further signs that the labor market is haemorrhaging jobs both clearly and broadly with fresh falls in the more authoritative measure of jobs covering payrolls.  Indeed, private sector payrolls are still falling, down over 0.5 ppt in y/y terms.  Admittedly, headlines may be formed around

Equities: Still a Rocky Road in 2026

April 17, 2026 12:49 PM UTC

·       Any deal between the U.S. and Iran would still be seen as a positive win in equities, as it would raise hopes that it could be followed by a multi-year settlement that could include more Iran oil and gas into the global energy markets and lower energy prices. No deal is also feasible,

UK GDP Review (Apr 16): Fresh But Fleeting Momentum Before the War

April 16, 2026 7:10 AM UTC

Without the outbreak of the Iran War there was already a split within the MPC about the policy outlook and that such divisions may have been accentuated by this latest GDP update which showed a very much above consensus m/m rise of 0.5%, the strongest in 14 months. But of course, the conflict has ch

DM Central Bank Signals Awaited

April 15, 2026 12:12 PM UTC

·       Fed/ECB and BOE meetings will likely see concern over the potential 2nd round inflation effects from the Iran war, but forecasts seeing inflation coming down in 2027 and no imminent signals of tightening from the ECB/BOE – our baseline remains for easing later in the year, as energy

UK CPI Preview (Apr 22): Inflation Being Fuelled But Watch Financial Conditions?

April 13, 2026 2:39 PM UTC

The stormy weather inflation wise is now very evident, most notably in UK fuel prices surging. Thus after a stable 3.0% (a 10-mth low) February’s headline – matching both consensus and BoE projections we see it jumping to 3.5% in March.  Services, however, may stay at 4.3% which was a four-year

Iran Blockade and What Next?

April 13, 2026 9:58 AM UTC

·       Though the U.S. is introducing a blockade on Iran oil exports, we think the U.S. and Iran remain reluctant to restart the war.  How Iran responds to the U.S. blockade is important.  It could choose to respond by attacking Gulf energy installations before or after the 2-week ceasefir

UK GDP Preview (Apr 16): Moving Sideways Even Before Conflict?

April 9, 2026 8:01 AM UTC

Fresh downside surprises were the story from the January GDP numbers and we expect a similarly muted outcome for the looming February numbers.  There were expectations that the economy would enjoy a further successive rise in January, thereby providing the best three-month showing in two years were

2-Week Ceasefire, Then?

April 8, 2026 10:09 AM UTC

·       The ceasefire will likely involve a new normal of shipping companies paying Iran a toll.  While this is adding a cost to Gulf crude oil/products and LNG, the premium will be a lot lower than the cost of an ongoing war.  The U.S. and Iran will now likely be reluctant to restart the w

2yr and The Iran War

April 7, 2026 8:00 AM UTC

·       2yr yields can edge lower from current less elevated levels, as DM central banks continue to try to calm fears of near-term rate hikes outside of the BOJ/RBA.  However, the key swing factor remains the length of the Iran war, as that will determine the trajectory of energy prices in

Iran War: Invasion Risks

March 31, 2026 10:55 AM UTC

·       Any ground-based invasion would likely result in a long war and Iran would likely counter with attacks on energy or other key facilities around the Gulf.  Sea and air based invasions are also difficult, while any victory would likely be followed by occupation.  WTI oil prices would

Markets: Short vs Long Iran War

March 30, 2026 8:00 AM UTC

·       For a 4-8 week war and 3-4 quarters of energy price normalisation, we see a 10% U.S. equity market correction in H1 2026 driven by the current Iran war and/or consumption slowing due to lower (real) wage growth, alongside still stretched valuations in equity and equity-bond terms.  T

Continuum Economics Calendar April 2026

March 27, 2026 2:30 PM UTC

Data and Events Calendar April 2026.

March Outlook: Iran War and AI Challenges

March 26, 2026 7:17 AM UTC

Our March Outlook is now published and please see all our economic and policy chapters below.  

DM FX Outlook: The Rest of 2026

March 25, 2026 7:55 AM UTC

Our baseline is for a 4-8 week Iran war, with WTI down to USD80-85 by June; USD65-70 end 2026 and USD60 by Q3 2027. This should see the USD return to a weaker profile later in the year. In our December Outlook, our favorites were the AUD and NOK based on yield spreads, but it is also worth noting th

UK CPI Review: Goodbye to the Good Old Days?

March 25, 2026 7:33 AM UTC

After January’s clear fall, even in the core rate, where the headline CPI rate fell from December’s 3.4% to 3.0% (a 10-mth low) it stayed there in February’s numbers – matching both consensus and BoE projections.  Services fell 0.1 ppt to 4.3% which was a four-year low (Figure 1) but the co

DM Rates Outlook: Mixed Policy Rate and Yield Paths

March 24, 2026 8:46 AM UTC

·        The multi quarter outlook for DM rates depends on the length of the Iran war Our baseline is that it will be a 4-8 week war (here) and a 3-4 quarter retracement of oil prices back to pre-war levels – longer from Europe and Asian gas prices. We forecast WTI down to USD80-85 by June

Western Europe Outlook: Economies Slip on Oil

March 24, 2026 8:00 AM UTC

·       In the UK, even without the Middle East impact we were suggesting a sub-consensus 2026 GDP picture which now has even greater downside risks attached.  Our baseline is for 4-8 week war and a reversal of oil prices over 3 quarters. The BoE has a symmetric stance between 2nd round effe

Outlook Overview: Iran War and AI Challenges

March 23, 2026 4:39 PM UTC

·       The Iran war macro impact depends on length of the conflict and impact on energy flows. Our baseline is for a 4-8 week Iran war, with WTI down to USD80-85 by June; USD65-70 end December and USD60 by Q3 2027 (here).  The jump in oil and gas prices mean at least a temporary increase in

Equities Outlook: Navigating Cyclical and Structural Forces

March 23, 2026 4:15 PM UTC

·        For global equities, our baseline (here) is for a 4-8 week Iran war, with WTI down to USD80-85 by June; USD65-70 end 2026 by June and USD60 by Q3 2027.  A fragile situation will mean it will take until 2027 for energy prices to return to pre-war levels. On a multi-quarter basis thi

Iran War Scenarios Updated

March 23, 2026 3:04 PM UTC

·       Our central scenario remains a 4-8 week war in Iran. Trump’s loathing of long wars and high gasoline prices will likely prompts the U.S. to declare victory.  A formal ceasefire is unlikely, but the end of hostilities could see an informal understanding of the Straits of Hormuz for

BoE Review: A Fragile MPC Truce?

March 19, 2026 12:59 PM UTC

Very clearly, the BoE kept rates on hold with no dissents as it understandably waits for more information about the length, breadth and repercussions of the Iran war.  The individual MPC member statements (as expected) showed diverging views as to the extent and reaction of what are now unfolding r

UK CPI Preview (Mar 25): The Calm Before the Storm?

March 17, 2026 8:53 AM UTC

Although most aspects of the January CPI came in a notch above BoE thinking, there was still a clear fall even in the core rate.  Indeed, the headline CPI rate fell from December’s 3.4% to 3.0% (a 10-mth low) and we see it staying there is February’s numbers - as do BoE projections.  Services

UK GDP Review: More Gloom?

March 13, 2026 7:41 AM UTC

Fresh downside surprises were the story from the January GDP numbers.  Expectations that the economy would enjoy a further successive rise, thereby providing the best three-month showing in two years were dashed as GDP instead stagnated.  Weakness was broad-based but most evident in private servic

BoE Preview (Mar 19): MPC Agree to Disagree?

March 12, 2026 2:35 PM UTC

The rate cut that seemed partly flagged by the narrow vote against easing in early February now looks highly unlikely this month. Indeed, it is also likely that the four who dissented in favor of cutting last time around will vote with the majority in favour of no change.  But while the MPC as a wh

Gulf Countries U.S. Investment Deals Risks

March 9, 2026 8:05 AM UTC

·       Lower budget revenue and a multi-year hit to tourism and the Gulf role as air transit hubs, could see delays and reduction in some parts of the Gulf states USD3.4 trillion deals with the Trump administration. The economic effects on the U.S. would likely be small and the geopolitics b

UK GDP Preview (Mar 13): Were Things Getting Better?

March 4, 2026 11:11 AM UTC

Belatedly, some good news; the UK economy grew for a second successive month in December, something not seen for almost a year.  Even more encouragingly, it may very well enjoy a further rise in the looming January data, thereby providing the best three-month showing in two years.  But as is famil

Markets and the Iran War

March 4, 2026 9:50 AM UTC

•    The Trump administration’s objective appears to be pivoting from regime change to hurting Iran ballistic missile capabilities, which argues for a 2-4 week war rather than a prolonged war.  However, the most intense missile battles will likely occur in the next one week and markets are

Continuum Economics Calendar March 2026

February 26, 2026 1:00 PM UTC

Data and Events Calendar March 2026.

GBP: Foreign Investor Flows

February 23, 2026 11:05 AM UTC

·       Inbound inflows into the UK have been solid in the last few years attracted by yield pick-up and fiscal consolidation for gilts and cheap comparable valuations in UK equities. UK BOP data suggests something would have to go really wrong to stop inbound portfolio flows e.g. UK recessio

UK CPI Review: Fresh and Marked Fall Resumes as Core Slips to Cycle-Low?

February 18, 2026 10:03 AM UTC

Although most aspects of the January CPI came in a notch above BoE thinking, the clear fall in the headline rate and further looser labor market messages still point to a BoE rate cut next month, not least given the likely return to the 2% target by April. These projected falls started with these Ja

UK Labor Market: Job Losses Weighing on Wages

February 17, 2026 7:52 AM UTC

There are further signs that the labor market is haemorrhaging jobs both clearly and broadly with fresh and deep falls in the more authoritative measure of jobs covering payrolls.  Indeed, private sector payrolls are still falling, down almost a full ppt in y/y terms and more steeply so (Figure 1).

UK GDP Review: Underlying Economy Fragility Does Continue

February 12, 2026 7:52 AM UTC

First the good news; the UK economy grew for a second successive month in December, something not seen for almost a year.  But as is familiar with recent UK real economy data, there is a negative flip side with the 0.1 m/m December advance negated by downward revisions to previous figures (November

UK Gilt Vigilantes and Politics

February 11, 2026 9:05 AM UTC

•    The Gilt market is sensitive to the prospect that Starmer/Reeves could be replaced, resulting in some changes to the fiscal rules in the scanario of a new PM/Chancellor.  Further fiscal rule refinement could be possible, but a new PM would want a political reset and this would likely pre

UK CPI Preview (Feb18): Fresh and Marked Fall to Resume as Core to Hit New Cycle-Low?

February 10, 2026 11:35 AM UTC

UK policy makers may not be able to say they have won the war against inflation, but a clear victory may be seen in the batter likely in the next few months with a likely return to the 2% target by April These projected falls are likely to commence with the looming January numbers (Figure 1) where a

EUR/USD: Europe’s Counter Threats to Trump

February 10, 2026 11:05 AM UTC

·       Europe is highly unlikely to weaponize its existing portfolio holdings or new flows into the U.S., as Europe is dependent on the U.S. nuclear umbrella and as EZ/EU decision making is slow and modest in action.  Such a move would be strongly opposed by EZ/European investors. Even so,

BOE March Cut and Then More

February 5, 2026 1:25 PM UTC

·       Six members of the MPC appear worried about the disinflationary impact from a weak economy and four of whom actually voted for a 25bps cut at the February meeting.  BOE Bailey and Mann, looking at the MPC minutes, are very close to voting for a rate cut, which suggests high confidenc

UK GDP Preview (Feb 12): Underlying Economy Fragility Continues?

February 5, 2026 11:21 AM UTC

Even given the surprisingly solid November GDP release, this merely returns the level of GDP to where it was in June, albeit briefly as for the latter.  Partly undermined by wet and warm weather through the month, we see no change on the December figure, in m/m terms (Figure 1), thus no reversal of

U.S. Inflows: Portfolio Dominates

February 4, 2026 12:05 PM UTC

·        Portfolio flows have dominated U.S. C/A financing looking at the breakdown of the balance of payment data (BOP), with no material slowdown in 2025 from foreign investors. U.S. investors did accelerate buying of overseas equities but this was counterbalanced by slower U.S. buying of

Europe Nuclear Weapons; NATO and Greenland

February 3, 2026 11:05 AM UTC

·        Without the U.S. nuclear weapon umbrella, Europe’s nuclear deterrent is too weak. Secondly, European countries are highly reliant on U.S. missile defense, command, intelligence and reconnaissance, which military experts estimate could take 10 years to replace. Major European count

Markets: Profit-Taking or More?

February 2, 2026 9:22 AM UTC

•    For now we see some further profit-taking on risky positions in gold/silver/copper/equities and short USD positions.  However, a bigger macro catalyst is required to produce a deep correction in equities and major risk off.  The nomination of Kevin Warsh for Fed chair is unlikely to be

BOE Preview: Clues From February 5

January 30, 2026 8:05 AM UTC

·       No change is expected at the Feb 5 BOE meeting, with communications leaving the door open to further interest rate cuts at a slower pace than 2025. However, we still forecast three 25bps cuts in 2026 to 3.00%, with the first likely arriving at the key April 30 meeting. The UK labor ma