Long-term Real Yields’ Decline Implies Stagflation

Yield curves almost everywhere have been flattening.  At the long end of yield curves, bonds have been rallying all year.  This is to be expected in Europe, where growth remains lacklustre, inflation is very weak, and the ECB is firmly in easing mode.  However, even...

Inflation to hold UK recovery back

There are some notable reasons for near-term reasons for optimism in the UK.  The housing market seems to be picking up, industrial production growth is looking up together with PMI data and the equity market has done well. All these are real and significant signs of...

Sterling’s rally to peter out on rising inflation

The Mexican peso is the only major currency to have appreciated against sterling this year (and then only by less than 1%). The trade-weighted sterling is the highest it has been since late 2008, when the currency was in the midst of its epochal devaluation. The...

UK: From Fixed to Floating; Mortgage Types Highlight Stress Ahead

Despite an historic low Bank of England base rate, the spread between the standard variable rate (SVR) for mortgages in the UK and the base rate widened significantly in the aftermath of the financial crisis, and has continued to trend higher. Fixed rate deals in the...