Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul>
<li>UK retail sales rebounded by 2.1% m-o-m in Feb-21, as expected, leaving the level about 10% below the Oct-20 peak. GDP has been less sensitive to lockdown this time so won’t bounce by as much, although a 25% recovery of Jan-21's fall would be good news.</li>
<li>Consumers have been shielded from the economic pain of lockdown but in March they stopped assuming that outperformance would extend through the year ahead. Mobility has improved recently but the UK remains among the most depressed in the world.</li>
</ul>


UK retail sales rebounded by 2.1% m-o-m in Feb-21, as expected, leaving the level about 10% below the Oct-20 peak. GDP has been less sensitive to lockdown this time so won’t bounce by as much, although a 25% recovery of Jan-21's fall would be good news.
Consumers have been shielded from the economic pain of lockdown but in March they stopped assuming that outperformance would extend through the year ahead. Mobility has improved recently but the UK remains among the most depressed in the world.


<ul>
<li>UK inflation disappointed in Feb-21 as it slowed to 0.4% y-o-y on the CPI and held at 1.4% on the RPI. Garment prices were the weakest on record for a February CPI. Games also weighed on the CPI, with some payback likely, while the RPI was more hit by insurance.</li>
<li>Locked down clothing shops have struggled to shift stock, smothering a strange surge from 2020 at the start of 2021. Our forecasts are lowered by the news, especially on the RPI. Hawkish labour market news should at least offsets this for the BoE, in our view.</li>
</ul>


UK inflation disappointed in Feb-21 as it slowed to 0.4% y-o-y on the CPI and held at 1.4% on the RPI. Garment prices were the weakest on record for a February CPI. Games also weighed on the CPI, with some payback likely, while the RPI was more hit by insurance.
Locked down clothing shops have struggled to shift stock, smothering a strange surge from 2020 at the start of 2021. Our forecasts are lowered by the news, especially on the RPI. Hawkish labour market news should at least offsets this for the BoE, in our view.


UK: Disinflation During Lockdown Disaster

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

In this note, we elaborate on why we expect the contagion from the sharp correction in Turkey to other emerging countries to be limited.The attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.

In this note, we elaborate on why we expect the contagion from the sharp correction in Turkey to other emerging countries to be limited.The attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.

FX Dashboard: Contagion from Turkey Should Be Limited

<ul>
<li>The UK unemployment rate declined to 5% in Jan-21, contrary to expectations for an increase. It was, at face value, caused by a drop in participation but is likely to reflect a repeat of the response-bias that unwound after the first lockdown.</li>
<li>Vacancies recovering pre-covid norms won’t prevent a belated rise in the UR. Kickstart listings have arrived, raising these vacancies beyond the pool of eligible candidates.</li>
<li>Furlough and grants for the self-employed continue to freeze the labour market in a tight setting, contributing to the strength in wages. Disappointment to the consensus in Jan-21 matched the signal driving our forecast, which has since rebounded.</li>
</ul>


The UK unemployment rate declined to 5% in Jan-21, contrary to expectations for an increase. It was, at face value, caused by a drop in participation but is likely to reflect a repeat of the response-bias that unwound after the first lockdown.
Vacancies recovering pre-covid norms won’t prevent a belated rise in the UR. Kickstart listings have arrived, raising these vacancies beyond the pool of eligible candidates.
Furlough and grants for the self-employed continue to freeze the labour market in a tight setting, contributing to the strength in wages. Disappointment to the consensus in Jan-21 matched the signal driving our forecast, which has since rebounded.


In this note, we discuss the most recent episode of turmoil in Turkey's markets and our near-term trading strategy for its assets.The attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.

In this note, we discuss the most recent episode of turmoil in Turkey's markets and our near-term trading strategy for its assets.The attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.

FX Dashboard: Turkey's Assets Descend into Familiar Turmoil

United Kingdom

The British Pound Sterling is the official currency of The United Kingdom. 

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UK: Consumers Stop Feeling Special

Consumers have been shielded from lockdown pain but in March they stopped assuming outperformance would extend. Mobility has improved recently but...

Phil Rush

UK: Disinflation During Lockdown Disaster

UK inflation disappointed as clothing shops struggled to shift stock, smothering its 2020 surge. Our forecasts are lowered, especially on the RPI,...

Phil Rush

FX Dashboard: Contagion from Turkey Should Be Limited

In this note, we elaborate on why we expect the contagion from the sharp correction in Turkey to other emerging countries to be limited.

Gautam Jain, PhD, CFA

UK: Labour Market Locked Down Tight

The UR's dip and recovering vacancies won’t prevent a belated rise in the UR. Furlough continues to freeze the labour market in a tight setting,...

Phil Rush

FX Dashboard: Turkey's Assets Descend into Familiar Turmoil

In this note, we discuss the most recent episode of turmoil in Turkey's markets and our near-term trading strategy for its assets.

Gautam Jain, PhD, CFA

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