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5 Things We Watch – UK Rates, OPEC, US Manufacturing, ECB & Portfolio

Happy Wednesday, and welcome back to our weekly edition of 5 Things We Watch, where we take you through the 5 things we are currently keeping an eye on in the global macro landscape.
2023-09-13

1) BoE Set To Hike Into A Recession?

This morning saw some bad prints coming out of the UK with GDP m/m coming in at -0.5% and industrial production m/m at -0.7%. We note that Bailey and the BoE are still expected to hike 1.5 times based on market pricing with inflation still running too high. Is this how stagflation smells? 

If we use Google searches made from the UK on ‘Inflation’ with a 3-month lead to gauge people’s price expectation we find it to be dropping like a stone y/y and the correlation to the British inflation basket is striking and suggests CPI is set to fall rapidly. Other leading indicators are hinting at further disinflation and the latest jobs report offered a notable revision which typically precedes recessions. The UK is not in a good spot and the BoE is arguably having an even worse time than the ECB

Find the four remaining topics and our latest portfolio update below.

Chart 1: Google Searches In The UK Hinting At CPI Prices Dropping Like A Stone

Happy Wednesday, and welcome back to our weekly edition of 5 Things We Watch, where we take you through the 5 things we are currently keeping an eye on in the global macro landscape.
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