wage growth

Poland’s Strong Consumption and Investment Point to Robust Growth with Mild Inflation Outlook

Combine rebounding investment with continued strength in private spending and you have a recipe for stronger economic growth. October's set of data suggests that GDP growth in the fourth quarter is likely to beat the 3.7% year-on-year rate posted in the third. At the same time, inflation is declining, which paves the way for another rate cut in December

Polish Investment Rebounds as Wage Growth Slows; Rate Cut Expected in December

Buoyant economic growth and signs of recovering investment are paired with slowing wage dynamics, easing upside risks to the current disinflation trend. With CPI inflation approaching the National Bank of Poland's target, the central bank may continue with policy easing. We expect another 25bp rate cut in December

East Asia Economic Outlook: BOK Holds Rates, Industrial Growth Continues, CPI and GDP Updates

The Bank of Korea is expected to hold the rates steady. Meanwhile, data highlights include Chinese industrial profits, Tokyo inflation, Korean and Taiwanese industrial production and Indian GDP

Stronger-Than-Expected US Jobs Report Complicates the Fed’s Path

US jobs growth was stronger than expected in September, but unemployment also rose amid workers returning to the labour market and seeking jobs. Given the Fed's recent hawkish shift and the lack of official data scheduled before the 10 December FOMC meeting, it is understandable that the market thinks the next move won't come until early 2026

Stubborn UK Inflation Keeps BoE Split, but December Rate Cut Still in Play

UK inflation has peaked, but the latest data is a tad hawkish for the Bank of England. Food inflation was strong, which is red meat for the hawks. Services inflation rose, once volatile items are stripped out. However, we still expect the Bank to cut rates in December

Early Third-Quarter Data Shows Stagnation Amid Weak Labour Market

Romania’s economy delivered a mild upside surprise in the third quarter. The flash estimate points to 1.6% annual growth, above our expectations, although it still contracted by 0.2% versus the previous quarter. Taken together, after nine months of 2025, the economy is 0.8% above the same period of 2024

Romania’s Inflation Holds Steady in October; NBR Rate Cuts Expected in 2026

Romanian Inflation eased marginally in October to 9.8% versus September’s 9.9%. Declines in some food prices provided relief, but services inflation remains tricky. Wage growth slowed to just 4.1% in September, acting as a clear drag on demand. We maintain our year-end inflation forecasts at 9.6% for 2025 and 4.5% for 2026

Sterling Rates Likely to Settle at 3.25% Amid Budget-Related Uncertainty

We think markets are right to price in more Bank of England easing, but the upcoming budget on 26 November can still bring both bullish and bearish surprises. Meanwhile, concerns around the US job market are offsetting the positive impact of a likely government reopening on risk sentiment

Hungary’s Economy Stagnates as Inflation Outlook and Labour Pressures Intensify

In our latest update, we reassess our Hungarian economic and market forecasts at a time when we are still waiting for the end of stagnation and hoping for better days to come. The economy is starving for those order book fillings, and also a big dollop of extra confidence 

BoE Faces Tight Vote as November Cut Unlikely; December Move Now the Base Case

The Bank looks likely to keep rates on hold on 6 November, despite better inflation and wage news. The committee is deeply divided, and we don't expect clear signals on the Bank's next steps. But assuming the Autumn Budget goes as expected, a December rate cut now looks more likely than not

Poland’s Inflation Eases to 2.8%, Paving the Way for Another NBP Rate Cut

CPI inflation moderated below both our expectations and those of the market in October, thanks to a lower core rate, making yet another 25bp rate cut in November highly probable. Our baseline scenario had assumed a pause in monetary easing, but given Poland's ongoing disinflationary trend, we're bracing for another 25bp rate cut next week

Tokyo Inflation Surprises to the Upside as Industrial Output Rebounds

Higher-than-expected Japanese inflation in October, together with improvements in production and retail sales, suggests growth is bottoming out toward quarter-end, while price pressures continue to intensify. The Bank of Japan may consider an earlier rate increase

Romania’s Inflation Holds Below Expectations as Food Prices Ease and Growth Risks Mount

Price pressures remained at a constant 9.9% in September, with seasonal food items offering mild relief. Services inflation continues to show resilience, and wage growth dipping below 5.0% adds further drag on demand. Our year-end projections remain 9.6% for 2025 and 4.5% for 2026

NBP’s October 25bp Cut — Glapiński’s Justification and the Monetary Outlook

The tone of NBP President Adam Glapinski’s press conference suggested openness to another interest rate cut in November. The new inflation projection, and macroeconomic data published before the November Council meeting will be important in shaping this decision. We assess the probability of another cut in November to be well above 50%

Czech Republic: Softer Inflation Driven by Food Prices, but Services Keep Pressure High

Unprocessed food was mainly responsible for Czech headline inflation ticking lower. Meanwhile, pricing in services remains robust, and may affect inflation expectations. One softer-than-expected inflation print is unlikely to alter the central bank's hawkish stance. We'd need to see more relaxed core inflation and disinflation in services first

Eurozone: Consumer Confidence Rebounds, but Retail Spending Remains Muted

Eurozone retail sales declined by 0.1% in August compared to July. This sales trend has been roughly flat since April. The worried eurozone consumer is seemingly shying away from the shopping street despite improvements in purchasing power across the bloc

Eurozone Jobless Rate Edges Higher, but Labour Market Remains Resilient

Unemployment remains near all-time lows as the economy maintains a slow pace of growth amid significant uncertainty. So, despite a small uptick in the unemployment rate, the labour market mainly shows resilience

US Jobs Market Cooling: Slower Wage Growth and Consumer Caution Signal Fed Rate Cuts

Last week's US data was in general good, but today's sentiment and labour data remind us that not everyone is feeling so positive. This is a constraint on US growth prospects and suggests the Fed will retain an easing bias through the rest of the year

Eurozone Inflation: Stable Core Amid Temporary Energy Spike

The pickup in inflation to 2.2% in September was mainly due to energy effects, which will fade in the months ahead. A small undershooting of the inflation target actually seems realistic around the turn of the year. Expect the ECB to hold rates steady for now

Netherlands Inflation Surges in September: Core and Service Prices Drive Higher

Headline inflation in the Netherlands surged well above expectations in September. Although a swift return to a more normal pace wasn’t anticipated, today’s data illustrates just how persistent price pressures can be

UK Inflation Holds at 3.8% as Bank of England Weighs Future Rate Cuts

Inflation is more or less at a peak, though it's likely to stay in the 3.5-4% area for the rest of this year. Rising food inflation is a particular bugbear of the Bank of England. Yet we aren't in the camp that thinks rate cuts are over, given the prospect of further progress in services inflation and wage growth

Eurozone Inflation Near Target, ECB Balances Between Stability and Dovish Pressure

Inflation in the eurozone ticked up from 2% to 2.1% in August on the back of slowing energy price declines. Core inflation remained unchanged at 2.3%, confirming a rather stable inflation climate despite ample risks to the outlook

Poland: Slowing Inflation Paves Way for September Rate Cut

The MPC wraps up its first post-summer holiday meeting on 3 September, and we expect a 25bp rate cut as policymakers attempt to adjust the monetary stance to lower inflation. As we see inflation sustainably returning to target, we’re still pencilling in another cut later in the year, likely in November

Bank of England: November Rate Cut Likely Despite Inflation Risks and Fiscal Uncertainty

Unlike financial markets, we still think the odds are tilted slightly in favour of another Bank of England rate cut in November. Nothing is guaranteed, though, and these are the key data points that will decide the fate of the Bank's easing cycle later this year

Hungary’s Labour Market Holds Steady Amid Seasonal Boost and Rising Wage Pressures

Hungary's recent labour market data shows a seasonal improvement, resulting in a record-high employment rate. The situation for employers is growing hotter as wage expectations remain high, but the economy struggles to thrive

Poland: Weak Industry and Construction, Softer Wages Open Door for Rate Cuts

July's macro data bolsters the case for the National Bank of Poland to continue its monetary easing path. Growth in industry remains slow, construction is still stagnant, wage increases have eased, and the employment decline has deepened. We expect a 25bp cut in early September, with the policy rate falling to 4.25% at the end of 2025 from the current 5.00%

UK Inflation Shows Mixed Signals; November BoE Rate Cut Still Possible

UK inflation was higher than expected in July, but given it was driven primarily by airfares, the Bank of England won’t be too concerned. A November rate cut hangs in the balance, though it remains our base case

Three Key Challenges Facing Jay Powell at Jackson Hole

The great-and-the-good of the American central banking world are off to the Fed’s annual Jackson Hole conference. And for Chair Jerome Powell, his appearance could hardly come at a more challenging moment. James Smith looks at the key questions facing the embattled Fed boss as financial markets brace for another fiery week to come

Polish Inflation Slows to 3.1% in July on Energy Price Drop, Paving Way for NBP Rate Cuts

Polish headline inflation has been confirmed at 3.1% YoY in July, from 4.1% YoY in June, as the effect of the partial unfreeze of energy prices in mid-2024 died out. With inflation within the tolerance band of the National Bank of Poland's target (2.5%, +/- 1ppt), the central bank now has room to continue its monetary easing cycle

Australian Wage Growth Holds Steady, US Core Inflation Surprises to the Upside

The Australian dollar has extended its gains on Wednesday. In the European session, AUD/USD is trading at 0.6551, up 0.33% on the day. The Aussie is trading at its highest levels since July 28, as the US dollar is showing signs of weakness against the major crurrencies.

UK Rate Vote Split Highlights Wage Growth Concerns Ahead of CPI Data

The British pound is showing limited movement on Monday. In the European session, GBP/USD is trading at 1.3455, up 0.05% on the day.

The Bank of England is keeping a close eye on two key fronts as it charts a rate path - inflation and employment. The BoE lowered rates last week in a decision that raised a lot of eyebrows since it took an unprecedented two rounds of voting to reach the decision. The close 5-4 vote points to dissension among MPC members as how best to proceed.

Japan's Weak Yen: From Economic Challenge to Strategic Buffer Amid Tariff Uncertainty

Japan: the weak JPY has turned from a problem to a nest egg . The level of JPY weakness has changed from a ‘problem’ to a ‘nest egg’ as the Trump administration’s tariff rate hikes require a buffer. With the buffer of a weaker JPY, the auto industry may be able to continue domestic production without having to raise prices significantly in the US in response to higher tariff rates.

Norges Bank Prepares for Hawkish Cut Amid Mixed Economic Signals

At its last meeting in January, Norges Bank’s Monetary Policy Committee kept the policy rate unchanged at 4.5% but reiterated the guidance that “the policy rate will likely be reduced in March”. Since then, spot activity data remained subdued, but the labour market showed signs of resilience and business expectations turned more positive.

Japan’s Path to Sustainable Growth: Targeting Net Domestic Fund Demand Over Primary Balance Surplus

As a new fiscal discipline, we need a new fiscal target that can take into account macroeconomic conditions, guiding net domestic fund demand to be around -5%. The previous fiscal target of achieving a primary balance surplus was flawed because it aimed to achieve a surplus regardless of macroeconomic conditions, making it impossible to sustainably expand the size of the economy.

GBP: BoE to leave door open to cut in May but risk of less dovish signal

The pound has outperformed alongside other European currencies this month benefitting from the significant improvement in investor sentiment towards the region. It has helped to lift cable back up above the 1.3000-level for the first time since last year’s US election.

GBP Steady as BoE Eyes Gradual Cuts Amid Resilient Inflation and UK Growth

The pound has outperformed alongside other European currencies this month benefitting from the significant improvement in investor sentiment towards the region. It has helped to lift cable back up towards the 1.3000-level for the first time since last year’s US election. In contrast, the pound has weakened modestly against the euro lifting EUR/GBP back above the 0.8400-level for the second time this year.

US Economic Woes Deepen: Consumer Sentiment Plunges, Tariffs Escalate, and Markets Sink

A drop in consumer sentiment brought fresh concerns about the US economic growth. Most major equity indices sold off and government bonds rallied, with the 10Y US Treasury yield dropping 11bp to 4.29%. Market digested news that Ukraine is going to sign a minerals deal with the US, and a confirmation from the US president that US tariffs on Canadian and Mexican imports will go up next week.