UK election, sticky services inflation rules out rate cut

Maybe a good place to start would be with the UK, with the Bank of England. We are coming off those inflation numbers yesterday, headline at 2%, but a lot of people are pointing to the fact that services inflation is still quite high, closer to 6% than 2%. So what does that mean for the Bank of England? That's your height. Actually, both headline and services inflation actually overthrew the Bank of England forecast yesterday. That's a second inflation surprise in the published their forecast. So that's why no one at the moment is expecting or virtually no one is expecting a cut today. The big question of course is what comes next. Growth has been strong as well, but with service with inflation at 2% on services inflation continuing to ease down as well as wage inflation. Our colleagues in London think that the bulk of England will actually cut in August and December, but with with proceed cautiously and the risks are for delay to the cut, especially because we also have coming a change in personnel at the bank where Deputy Governor Ben Broadband is going to be replaced by Claire Lombardi. And we think that unbalanced it could actually tilt the balance of the committee toward a slightly more hawkish tone in August. So today the last meeting from Ben Broadband and of course one major political hurdle out of the way because he would have had the UK elections by then. Let's turn to the SNB. The Swiss National Bank was the first of the major central banks to actually start the cutting cycle back in March. Today it feels like the analysts, economics community are are split about whether or not they should go for another cut. And certainly they've got to keep an eye on the appreciation of the Swiss franc. So how does that can, how is that going to be factored into the messaging and the potential decision that comes out of today's meeting? You're completely right. So it's a very, very close call. If you look at the distribution of analysts out of 28.16 or 44 hold and 24 cuts, markets are marginally favoring a cut. So it's a very difficult decision and your height is a big element that has made this decision. Finally, balance is what has happened to the Swiss park, especially following the call by President Macron for snap election which has seen the Swiss franc appreciate about 2% against the euro above like euro effect on safe haven demand. So we think it's going to be a very close call. The the the main thing is that so far through 2023 the S&B had been supported the franc by selling foreign currency. We think it's actually not very willing to expand its balance sheet again by buying the foreign currencies to weekend the funk. And so that's the main reason why if today they decide it will be a cut, it's free because they keep an eye on the currency. Yeah, that is true. Though we had a chart up of inflation and inflation is dropping in Switzerland and I thought it was really interesting that their forecast for inflation is 1.1% in 2026. So it will be difficult to justify restricted policy. Final central Bank of the day that we need to talk about is Nordge's bank. They seem to be standing out to me as extremely hawkish versus other central banks around the world. And of course they are a very oil dependent economy. Lots of wage pressures there as well. It seems unlikely that we're going to move away from that hawkish rhetoric at the Nurses Bank. It's your height as to nothing coming probably at this meeting. The big question is whether they change slightly their messaging. So far they have been pointing to September cut. There's a question with wage growth still strong, the economy is performing well, as you say, windfall from the energy prices as well. And so the question is whether they will start shifting the rhetoric towards December, in which case it may actually be one of the very, very last central bonds in advanced economies to to move. And I think that's really going to be the focus of this meeting, September or December. What sort of messaging?