Chart of the Month: August 2023


As US core inflation shows signs of trending back toward the Fed target of 2%, the diverging trends of the ECB and BoE are apparent. Whilst core price momentum has slowed in the Eurozone, the UK is still in the midst of spiralling wage price increases, leaving the BoE in a precarious position. The three central banks are more than likely approaching the summit of their monetary hiking cycles but risks remain. The Fed leads the pack with the ECB probably a quarter behind them in the cycle, whilst the BoE’s position is the hardest to determine as communication has been disjointed.