European Banks: Weekly Briefing; CoW: Banking market concentration

Research evidence excerpt

European Banks: Weekly Briefing; CoW: Banking market concentration

m the prior reading of -10.2.

• BoJ hiked by 25bp: The BoJ raised policy rates by 25bp to 1%, the highest level since 1995,

emphasising upside inflation risk with the decline in downside economic risk. It also decided

to halt its JGB purchase reductions from FY27. At the post-MPM presser, Deputy Governor

Uchida avoided any hints about the pace of future hikes. (link)

• UK CPI - below: Annual CPI inflation in May was unchanged from April at 2.8%. This was

below BARCe and 41bp below the BoE's most recent forecast. There are still minimal signs of

indirect effects from the energy price shock, which adds to our conviction that the BoE will be

on hold this year. (link)

• Fed held: The FOMC held rates and delivered a minimalist statement that reaffirms the focus

on price stability and ample reserve policy. The revised dot plot indicates nine of 18

participants favouring rate hikes this year as they revised up their inflation projections

significantly. (link)

• BCB cut by 25bps: The Copom reduced the Selic 25bp for a third meeting, to 14.25%, as

expected. Its inflation forecast rose further, with the board justifying the cut by extending its

relevant horizon by an extra quarter, to Q1 28. While no doors were closed, Barclays'

economists see limited room for new cuts beyond August, if that. (link)

• UK elections: Andy Burnham and Labour have won the Makerfield by-election. This means

Burnham is now an MP-elect and Barclays economists would expect a formal challenge to PM

Keir Starmer at some point next week. A contested leadership process is likely to take weeks,

if not months, to complete. (link)

• BoE held: The MPC held Bank Rate at 3.75% with a 7-2 vote and cautious tone, in line with