UK inflation higher than expected in April. A 🧵 Outturn=3.5% Expected=3.3% Last month=2.6% The Consumer Prices Index (CPI) rose by 3.5% in the 12 months to April 2025, up from 2.6% in the 12 months to March. www.ons.gov.uk/economy/infl...

Anticipation builds ahead of UK CPI inflation print tomorrow. Inflation in April expected to ⬆️ April consensus view=3.3% March actual=2.6% Inflation target=2% Inflation looks to be going in the wrong direction. But April’s figure is plagued by noise… moneyweek.com/economy/live...

US effective tariff on China=39% China effective tariff on the US=27%

On @bloomberg.com last week talking about trade deals! Trade deals that bring tariffs down from liberation day highs are great news. They improve the outlook. That said RELATIVE to 6 months ago tariffs are higher. Outlook weaker.

Fed decision today No change. Didn’t really learn much about where next. We heard a lot about uncertainty. We heard the risks were to the upside on inflation and unemployment. Dual mandate pulling in opposite directions. www.cnbc.com/amp/2025/05/...

News: US NFP =177k in April Higher than expected= 130k Jobs growth =185k in March Why this matters: Strong jobs data shows that elevated policy uncertainty and soft sentiment data is not yet reflected in hard data. www.fxstreet.com/macroeconomi...

Thanks to @bloomberg.com for having me on the show this morning to talk about tariffs, exchange rates and central banks. 🧵

Uk headline inflation falls to 2.6% in March. 2.8% in Feb. pretty much as we had expected. Core inflation 3.4% March 2025 3.5% February CPI goods annual rate eased from 0.8% to 0.6% CPI services annual rate slowed from 5.0% to 4.7%. www.ons.gov.uk/economy/infl....

Annual growth in employees' average regular earnings excluding bonuses in Great Britain was 5.9% in December 2024 to February 2025, and annual growth in total earnings including bonuses was 5.6%. www.ons.gov.uk/employmentan...

UK wage growth rose 5.9%!! Data released today. The ONS said pay excluding bonuses rose 5.9% in the three months, up from 5.8% in the period through January. Private-sector wage growth, held at 5.9%. That is high! But data measurement means we don’t know if this is driven by compositional changes.

Tariffs have surprised to the upside. We judge that negotiations will give rise to a small fall in the effective of tariff rate. Our new macros forecasts can be found here. ifamagazine.com/vanguard-ami...

China places 84% tariffs on US goods. US places a 145% on Chinese goods. The trade war escalates.

In the middle of a US-China trade war.

Stocks recover today, but not fully! The 90 day pause of liberation day tariffs (for all except China) provides relief to global stock. But stocks are still below levels seen prior to Liberation day. Stocks dip down again as the China/US tariff got for that continues.

EU pauses the tariffs it had intended to place on the US in retaliation for the steel, aluminium and auto tariffs that were placed on the EU. www.theguardian.com/world/2025/a...

US tariffs of 145% on. China means =>trade just stops between the two economies => shares and bonds yields plummet again www.theguardian.com/business/liv...

The trade and financial channel are linked.

Commodities: Gold ⬆️ Currencies: Euro ⬆️ Stocks: ⬇️ Bond yields: long end - 10 yr ⬆️ short end - 2 yr ⬇️ Europe

Not a good day for European stocks.

The dollar has weakened against its G7 peers. The euro jumping as much as 1% to $1.1069.

Markets start to pricing in more rate cuts in 2025. BoE now expected to cut 4 times in 2025.

It was an honour to appear in front of the Treasury Select Committee last week. A key question was: how tariffs might affect the UK economy and the fiscal finances. They also asked about how markets price fiscal risk. Answer: bond markets prefer fiscal rules to be met. #TSC #SpringStatement2025

US Treasuries hit hard. 10-year yield jumps to 4.51% before easing to 4.42%.

S&P has fallen by over 500 points (10%) in the last couple of days.

The chart below doesn’t include the 50% uplift to Chinese goods which was announced last night. That would take the total rise in Chinese tariffs in 2025 to 104%.

Stock Rout Deepens on Tariff Shock as Bonds Rally: Markets Wrap www.bloomberg.com/news/article...

Liberation day tariffs. 1. Min 10% on all countries 2. Higher rate applies to countries listed in image below. EU 20% UK 10% China 34% Rates are 1/2 the estimated reciprocal tariff. Based on what the countries charge as monetary and non-monetary tariffs on US goods.

All goods to see a minimum of 10% tariff. Some economies will see a higher rate. It will be one-half of a calculated reciprocal tariff. The "reciprocal" tariff rate is based on a government tally of the levies and non-tariff barriers that other countries impose on US goods.

Putin Agrees to Limit Ukraine Attacks But Won’t Commit to Truce www.bloomberg.com/news/article...

Happy International Women’s Day! Last week it was an honour to be on a panel with our President at CIO Greg Davis and our Head of Fixed Income, Sara Devereaux. Topic: Visibility. How being seen and heard can advance your career. Being visible can creates opportunities.

US #inflation - the last mile back to 2% is taking time.

My first tagged post in blue sky!

Vanguard are excited to co-host an expert panel event on aging in Britain. The event has now started.

Half and half! Analysis of UK gilt yield moves in January show that about half the rise is mimicked by changes in the US(global). And half come from UK specific factors. UK Markets Cap Dire Week With Yields Stuck Near Decade Highs www.bloomberg.com/news/article...

Lots of coverage ⬆️ UK bond yields. But it’s driven by global factors; less due to UK specific factors. Analysis of the spread between UK and German and US bond yields (10 & 30 yr) show little change over the past month. The spread would have increased if UK factors were to blame. on.ft.com/3PrUbdJ

UK 10-year borrowing costs hit highest level since 2008 Uk 10 year bond yield on close 7 Jan =4.8% Highest since oct 2008. on.ft.com/4j8KmPK

Interesting chart on number of sick days and how it’s different across countries. UK 6 days Germany 25 days France 14 days US 2-3 days: other source. How much sick pay is too much sick pay? on.ft.com/4j6T80E

Bank of England monetary policy decision today was as expected! No change. Bank Rate maintained at 4.75%. 6 members for no change and 3 voted for a 25bps cut (Dhingra, Ramsden and Taylor). Minutes: www.bankofengland.co.uk/monetary-pol....

Incredible to be part of the @bloomberg.com conference today. First up a discussion of markets, equities, bonds and currencies and how they are responding to all the recent macro and geopolitical noise. A thread.

Heres a preview to our economic and market outlook 2025! 1. US growth resilience as due to good luck (supply side forces) rather that Fed policy (soft landing). 2. Other regions have been less lucky. 2. Era of sound money (positive real rates) lives on! corporate.vanguard.com/content/corp...

Michel Barnier faces no-confidence vote over budget measures on.ft.com/4iii2K2 Barnier activated article 49.3 of the French constitution on Monday to try to push through the first part of his €60bn proposed fiscal package of tax rises and spending cuts. He lacks a majority in the National Assembly.

Nice leader in this weeks @economist.com Options: 1. Ukraine gets backing of protection from European economies (requires European defence budgets to rise). 2. Russian ceases fire but maintains the territories it now occupies. The least bad deal is 1.

This picture of UK stagnation surprises me…. No matter how many times I see it. Can Europe build its first trillion-dollar start-up? on.ft.com/4f22o2Y

This picture of UK stagnation surprises me…. No matter how many times I see it. Can Europe build its first trillion-dollar start-up? on.ft.com/4f22o2Y

How the car industry is exposed to Donald Trump’s tariffs on.ft.com/3Za0BTw

Net migration to the UK had hit a record 900,000 in 12 months to June 2023,revised figures show. This is up from the previously reported 740,000. However since then migration flows have fallen back to 728,000 in the year to June 2024. on.ft.com/4eUNviC

@katie0martin.bsky.social heard you on the radio recently talking about how great Bluesky is. And then days after it was also reminded by @tonyyates0.bsky.social. So far it’s lived up to my expectations. Although some people and companies not here yet.

It was a pleasure to be on @bloomberg.com this morning talking about vanguards economic and market outlook for 2025. 1. US economic resilience is more about good luck than the Fed. 2. Euro area struggles out of stagnation, given lingering effects of the energy crisis and weak external demand.

Always a pleasure to be on @bloomberg.com. Even on a very wet morning.

Looking forward to being on @bloomberglp.bsky.social tomorrow morning to talk about vanguard’s global outlook for 2025! We focus on what happens beyond the landing (a topic of huge discussion over the past year). corporate.vanguard.com/content/corp...