Consumer matters

Daily update

The Bank of Japan did what was expected and raised rates a quarter point. Dramatic headlines that this is the highest rate in thirty years should not be taken too seriously (parallels to 1995 are not helpful). BoJ governor Ueda emphasised wages as being important to determining future policy decisions.
UK November retail sales data was modestly weaker than expected, but previous numbers were revised higher (UK data overdoes the pessimism). Government finances showed a relatively stable deficit and debt level compared to GDP.
US November consumer price inflation reported rent and the fictitious owners’ equivalent rent experiencing the most dramatic disinflation in almost 40 years; this seems unlikely. People might notice beef prices at never-before seen levels, record fish and seafood prices, electricity prices at all-time highs, banana prices up significantly. These high frequency purchases shape inflation perceptions in a way OER (a price no one pays) does not.
This is the last morning audio of comment 2025. Normal service will be resumed on Monday 5 January 2026. I would like to take this opportunity to wish everyone as prosperous a new year as circumstances will allow. And to everyone who has tuned in from time to time over the course of this year, thank you for listening.