UK Fiscal Risks, Global Yields and the Fed at Jackson Hole

Matt Jones and Neil Staines discuss a global macro backdrop shaped by UK fiscal uncertainty, renewed inflation concerns, rising long-end bond yields and the policy signals investors will be watching at Jackson Hole.

In the UK, a higher inflation print was driven by energy price-cap changes, while services and labour cost growth continued to ease. Weak retail sales, a disappointing fiscal print and concerns around the jobs market remain consistent with a cautious view of the UK economy and have dovish implications for the Bank of England. Attention now turns to the Governor’s comments in Wyoming and, further ahead, the 28 October Budget under the new Prime Minister.

Globally, renewed US-Iran tensions have brought energy prices, particularly European gas, back into focus alongside inflation concerns. Fiscal uncertainty in France and heavier government and hyperscaler debt issuance have also contributed to higher yields at the long end of global curves. Next week brings RBA minutes, German Ifo, a broad range of EM inflation and central bank events, and the Jackson Hole gathering.

In the US, Fed minutes highlighted the committee’s sensitivity to inflation, while Treasury measures aimed at supporting the long end of the bond market are viewed as negative for the dollar. Focus now shifts to Jackson Hole and the Fed reaction function, with NVIDIA earnings providing another important market event.

Chapters

00:00 Show Intro
00:33 UK Outlook
02:13 Global Macro Watchlist
03:52 US Rates and Policy
05:58 Weekend Sports Radar
06:42 Long and Short Picks
06:59 Wrap Up and Disclosures

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