Eight UK economic themes for 2025 - Deutsche Bank

Deutsche Bank has identified eight key economic themes expected to shape the UK's economic landscape in 2025:

Theme 1: Stagflation?
Deutsche Bank currently forecasts Q4-24 to see 0% q-o-q GDP growth – signalling no growth in the entire second half of 2024. But it doesn’t expect 2025 to be as weak, as underlying GDP growth has been stronger than the headlines suggest.

Theme 2: Watch energy prices.
Gas prices have soared recently – something households will be watching closely. The Ofgem Price Cap has already registered two consecutive quarterly increases. Our models now point to a hefty spring increase of near 7%-10% should gas and electricity futures prices remain steady for the next month or so. This would add another 0.25pp to our already elevated headline CPI projection for Apr-25.

Theme 3: Inflation.
The consensus may be underestimating inflation, the bank said. A central hypothesis of ours is that headline CPI will reverse course in 2025 – albeit temporarily. After averaging 2.6% y-o-y, we see price momentum rising to around 3%, citing higher energy prices, a reversal in food price momentum, the rise in employer National Insurance Contributions to also add to retail prices, and continued services inflation keeping headline CPI above-target.

Theme 4: Expect a cooler labor market.
A push higher in the unemployment rate looks likely, with jobs demand having slowed - particularly following the Autumn Budget. We see the jobless rate rising above 4.5% by late spring— above the MPC’s and OBR’s projections. Equally, we expect pay settlements will likely come in softer. As unemployment rises, and the labor market cools, pay settlements are likely to fall further.

Theme 5: House prices will push higher in 2025.
The German bank remains optimistic on house prices this year for a number of reasons. With CPI around the BoE’s target, savings becoming more liquid, we expect housing demand to pick up in 2025, adding the recent rise in mortgage approvals over the last few months is indicative of growing demand.

Theme 6: A painful sequel to the Autumn Budget?
From a fiscal policy perspective, there will be three key things to brace for in 2025. First, big revisions to the OBR’s macroeconomic projections are likely given market rate expectations and recent growth data. This should shift fiscal projections meaningfully following on from the Autumn Budget. Second, spending pressures are likely to only pickup as economic growth fails to match the fiscal watchdog’s more optimistic projections (including social benefits). Third, as a result of the above, more borrowing and tax rises, we think, will be likely this year.

Theme 7: Industrial strategy.
The Government will publish its long-awaited Industrial Strategy in 2025 - something that will make many headlines. Where the Government focuses its efforts in raising productivity - including investment - will be important. The execution of planning reform will also be critical in directing infrastructure and housing investment.

Theme 8: Geopolitics and trade will be in the spotlight.
International events will matter to the UK economy, namely how the US decides to deal with UK trade going forward. The implementation of tariffs - both direct and indirect - will weigh on domestic growth. The UK's reset with the EU will also be an important economic and political milestone.

https://www.investing.com/news/economy/ ... nk-3799767

How To Survive "The Great Taking" In 2025

-The Coming Collapse Is by Design
-It’s a “scheme of central bankers to subjugate humanity by taking all securities, bank deposits, and property financed with debt.”
-The trap has been set, and the legal plumbing is in place.
-Webb makes a compelling case that the next financial crisis won’t be an accident; the global elite are making it happen to proceed with The Great Taking.


full story :
https://www.zerohedge.com/geopolitical/ ... aking-2025

it was a terrifying scenario

US insurers slump as Los Angeles wildfire loss estimates hit $20 billion

The Los Angeles wildfires have caused significant damage, resulting in at least 10 fatalities and the destruction of nearly 10,000 structures
U.S. insurance stocks slid on Friday as analysts estimated insured losses from the wildfires menacing Los Angeles could reach as high as $20 billion, potentially making it the costliest disaster in California's history.
Analysts are evaluating the financial impact of the disaster, with J.P.Morgan doubling its forecast of insured losses to over $20 billion. Wells Fargo also expects similar insured losses and said the total economic hit from the disaster could be well above $60 billion.
"While leading U.S. property insurers are in good financial condition, the California property insurance market has been challenging... leading many insurers to re-think their product offering, including an outright exit from the market," Morningstar DBRS wrote in a client note.

The S&P Insurance Select Industry index was last down 3.2% on Friday.
Major U.S. insurers like Travelers, Mercury General, Allstate, Chubb, and AIG saw their stock prices drop by 4% to 32%
European insurers such as Beazley, Lancashire, and Hiscox also experienced declines

full story
https://www.reuters.com/markets/us/us-p ... 025-01-10/

Nvidia sheds $589 billion in market cap on DeepSeek concerns, most in history

Shares in artificial intelligence-darling Nvidia (NASDAQ:NVDA) tumbled nearly 17% Monday, erasing $589 billion in market value and weighing on the tech-heavy Nasdaq Composite, as a new model from Chinese start-up DeepSeek cast doubt over heavy recent investments in AI infrastructure. Despite the massive sell-off, NVIDIA praised DeepSeek, calling it an "excellent AI advancement and a perfect example of Test Time Scaling."

Nvidia closed down 16.86% and lost more market value in one day than any other company in history.

full story:
https://www.investing.com/news/stock-ma ... ry-3831096

Canadian dollar may hit record low if US imposes 25% tariffs, says Wells Fargo
The Canadian dollar could potentially reach an unprecedented low of 1.70 per US dollar if the United States decides to impose a 25% tariff on Canada, said Wells Fargo (NYSE:WFC) strategist Erik Nelson.
He added that the likelihood of such severe tariffs being implemented is highly unlikely.
On Wednesday, the USD/CAD exchange rate saw an increase of 0.5% to 1.4466.
Nelson explained that a rough estimate would suggest the USD/CAD exchange rate could move towards 1.70 if a 25% permanent tariff were to be put into effect.
He questioned why the USD/CAD rate isn't higher if potential currency fluctuations could be this significant. The reason, he noted, is that few people believe these tariffs will be in place for more than a few days.
According to Nelson, the minimal risk pricing in the pair reflects the view that these tariffs are ultimately a negotiation tactic.
Nelson stated that while the market does factor in some risk premium for potential US tariffs on Canada, it is not significant.

source:
https://www.investing.com/news/forex-ne ... CH-3837257

Four Bank of England scenarios, with a rate cut widely expected

Expect an 8-1 vote in favour of another rate cut next Thursday, though we doubt the Bank will drop too many hints on what comes next. We're looking for three further cuts later this year, but a shaky jobs market and the prospect of lower services inflation risks pushing the BoE into more aggressive moves

• The BoE is expected to vote 8-1 in favor of a 25 basis point rate cut on February 6, with further cuts likely throughout the year.

• Financial markets are anticipating four rate cuts in 2025, with a total of 78 basis points of easing by year-end.

• Growth and inflation forecasts are expected to be revised down, with growth potentially lowered to around 1% for 2025.

• Headline inflation may rise to 3% later this year, mainly due to energy prices, but is expected to be at or below 2% in two years.

• The jobs market is shaky, with private-sector employment falling and wage growth expected to slow.

• Gilt yields have eased, and the pound has recovered slightly, but potential downside risks remain for sterling.

The overall theme is dovish, with the BoE likely to continue gradual easing without committing to specific timing. The risk of more aggressive easing later in the year is also highlighted.
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. full story:
https://think.ing.com/articles/four-ban ... -expected/

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