Macroeconomic & Geopolitical

Is the U.K. the Newest Leading Indicator?

November 2021 – 3 min read
An upside surprise in U.K. inflation and improving employment trends reinforced markets pricing a 10–15 bps rate hike by the BoE in December, while energy prices eased following the announcements from China, which could provide downside pressure to market inflation expectations.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • The core Personal Consumption Expenditure (PCE) deflator—the Fed’s preferred inflation measure—should rise in October as price pressures get worse before they get better. Meanwhile, markets await President Biden’s Fed nomination.
  • Flash PMIs for November should show the Q4 rebound and impacts from early holiday shopping.


  • We will watch the November euro area consumer confidence indicator, which has wavered around all-time highs for three months.
  • Euro area and U.K. PMIs will indicate whether supply-side constraints and inflation are starting to weigh on production. They haven’t so far.

Asia Pacific

  • Japan PMIs for November will show the expected normalization in activity for Q4 and whether supply shortages remain an issue for production. 
  • The PBOC meeting will show how much additional stimulus, such as a reserve requirement ratio (RRR) cut, can be implemented; only targeted measures have been emphasized so far. 

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Bonnie David


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