Simon French

Labour’s leadership aspirants need a coherent story to sell to the bond market. Particularly on UK inflation. Else they should expect a painful reckoning. My thoughts in today’s @thetimes ahead of the local elections thetimes.com/business/econo…

I will be covering this in my Times column tomorrow. Bond market pricing has repeatedly shown over the last 18 months that it judges a worse inflationary outcome under alternatives from within the PLP.

Last pre-season warmup at Long Marston, and somewhat incredulously watching the rain satellite….

@UnderSneege @claireharr It would be cruel

@Frencheconomics @claireharr It would be a fun exercise to ask leading Green Party figures to explain the meaning of basic charts like this live on TV.

The Green Party must look at this and conclude that we just haven't tried hard enough over the last decade to screw our own labour market.

@MerrynSW That was an absolutely cracking pod. Love it 👏👏

Talked about this on the pod with Andy Haldane. If it wasn't for bad/uncertain policy, the U.K. could fly.

@dominicoc Hi Dom, it is created by aggregating a range of deposit and borrowing data series from the BoE’s Bankstats (updated today)

@Frencheconomics Hi Simon what is the source of that chart? Most interesting.

The deleveraging of the UK household sector to become net cash is one of the more striking economic transformations of the last 20 years

@thunderhorseDB Quite out of date as last data is for 2023/24. Would suspect >£600bn given appreciation in global equities over this period.

@Frencheconomics How does this compares to the Stocks and Shares ISA?

The UK household love of the cash ISA shows no sign of abating. Another £4.4bn added in March. Honing in on half a trillion pounds of deposits.

@WorkyJ Trust me, I dont mince my words from a business standpoint. It is one of the privileges of my role, I can say it as I see it. I just happen to think her instincts are sound, the execution less so. I respect you see it differently.

@Frencheconomics You’re being way too generous which is fair because your business requires access to these people. But she hasn’t got a clue what she’s talking about… she’s just doing a derivative of the ‘more money in your back pocket’ guff. Watch her enthusiastically subsidise demand.

Personal view on this statement from the Chancellor. I like the focus on the role of the fiscal/regulatory authority in setting the conditions for lower UK inflation (something it has spectacularly failed to do for two decades). It is a really important agenda for raising living standards/ disposable incomes. I dislike where the focus interprets this role as suppressing price signals, rather than setting dynamic supply-side conditions that (in turn) reduce the frictions that generate inflation.

The key chart from the BoE's latest MPR, Scenarios A&B both point to sufficiency (in policy terms) from reversing out the anticipated cuts to Bank Rate that were priced in up to the start of the Iran War.

London is Europe's most dominant tech hub and it's not even close. And the gap is widening as London becomes an AI hub Great chart from @yoramdw and the @dealroomco team cc @sabben

Wow I guess Dallas landlords are way less greedy than landlords in other cities, or interest rates are dramatically lower, or there’s no demand because everyone is leaving. Supply can’t lower prices, so it must be those other things…

@Alan57623976 👏👏

@Frencheconomics Need more straight talking and less strait talking?

The Bank of England’s latest policy decision is announced at noon. Widely expected to see a Hold in UK interest rates, but with most attention - quantitatively - on the vote split, and qualitatively on whether any of those voting to Hold are approaching the threshold of evidence to flip to a Hike at the June meeting. The central inflation forecast will be highly sensitive to the conditioning energy price assumptions and I wouldn’t be surprised to see a range of scenarios illustrated in the MPR - as any price assumption always ran the risk of being out of date by the time of this afternoon’s press conference. Don’t rule out a question or two on tolerance for elevated Gilt yields - we have seen (Sept 2022, Jan 2025) interventions from the BoE to address rapid shifts in financial conditions. We are probably not there yet, but some form of framework for intervention is a reasonable question for the Governor to face. Personally, I’d vote for a Hold but also (hope) that I’d be increasingly vocal that the monetary authority’s ability to credibly look through inflation of this nature is impaired by the UK’s track record on inflation (3% for 15Y) which largely stems from a lack of focus on the health of the UK supply side. My column last month laid out why this “speaking truth to power” on this issue is important. thetimes.com/business/econo…

@thunderhorseDB I think the external member role provides that air cover, deliberately so. I also think the Governor has a role, privately, to do so.

@Frencheconomics The challenge you have is that BOE also needs to be apolitical. Commenting too directly on bad supply side policies creates that risk.

Oil is now at NEW HIGHS since start of the war. With Brent at $122.61, it has now DOUBLED since the start of the year (+75% since start of war). Expect further upward pressure on UK borrowing costs at the open today. BoE meeting later today.