The UK’s Deleveraging Failure

The synchronised nature of the global economic recovery has fanned speculation that the post-crisis deleveraging in developed countries has finally come to an end. However, we err on the side of caution and cite evidence from the UK, which suggests there has been...

Negative Feedback Loop in Europe

While most of the attention post-Brexit has been on the UK, we are far more concerned about Europe.  Markets and the economy operate in a feedback loop, and the performance of European banks relative to the stock market points to a fall in lending ahead in Europe. ...

Credit in UK Booming Again; Wage Growth Has Lagged

There are continuing signs the UK’s economy is increasingly resembling itself prior to the financial crisis.  House-price growth has cooled of late, but is still growing at 4.6% YoY, down from almost 12% last summer.  Consumer credit is also growing at a healthy clip,...

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...
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