NBP: Governor Glapiński Pessimistic About Political Consensus Around 'SAFE 0%'

As was reported on earlier (see UK: Reports: Scottish Labour Leader To Call On PM To Resign) leader of the Scottish Labour Party, Anas Sarwar, has publicly called on PM Sir Keir Starmer to resign. He becomes the seniormost Labour figure to call for the PM to stand down. Pippa Crerar at the Guardian reports that "Sources close to Eluned Morgan, Labour first minister in Wales, insist that she is not planning to say anything on Keir Starmer's leadership today - despite reports to the contrary."

• Reuters reports comments from a Downing St. spox, saying that Starmer is "one of only four Labour leaders ever to have won a general election", and that the PM "has a clear five-year mandate from the British people to deliver change, and that is what he will do."
• Deputy PM and Justice Secretary David Lammy, Defence Secretary John Healey, and Chancellor of the Exchequer Rachel Reeves have now backed Starmer publicly. Lammy said the mandate won by Starmer in 2024 meant he should retain the party's backing. Reeves, whose political future is tied to Starmer's, said "With Keir as our PM we are turning the country around." Healey says Starmer has his "fullest support."
• Starmer's ability to remain in office in the short term could come down to whether other Cabinet members come out in favour of Starmer remaining in office, as well as if a groundswell of backbench Labour MPs join Sarwar in calling for the PM's resignation. 

Congress is running out of time to avert a shutdown of the Department of Homeland Security on February 13. For markets, the impact of a shutdown will be limited as the vast majority of the federal government - including agencies that produce key data releases - are funded through September. 

• Lawmakers have several options, none of which appear likely at this stage: They could strike a deal on a full-year funding bill; pass another short stopgap measure to buy more time to negotiate over immigration operations; or pass a full-year stopgap to keep funding at Biden-era levels for agencies under the purview of the DHS. 
• Politico reports that Democrats sent draft legislation to Republicans on Sunday that would "codify the immigration enforcement guardrails," including "new judicial warrant requirements and limits on masking by federal agents.”
• Punchbowl writes, “Congress passing a bipartisan deal to fund DHS through Sept. 30 by the Friday deadline seems very unlikely. In fact, an agreement may not be possible at all as the two sides remain far apart."
• The Hill notes, “A DHS shutdown would have implications beyond immigration agencies, also bringing other federal agencies within the department to a halt, including the Transportation Security Administration (TSA), the Federal Emergency Management Agency (FEMA), the U.S. Coast Guard, and the Secret Service.” According to Polymarket, the implied probability of a DHS shutdown is just over 70%. 

Figure 1: Another US government shutdown by February 14?

Source: Polymarket

Norwegian January inflation is due tomorrow at 0700/0800GMT. There remains a good deal of uncertainty amongst analysts around the speed and magnitude of Norges Bank rate cuts this year, so it will be a closely watched report. Q4 national accounts data did not provide any material dovish signals for the rate outlook, so a meaningful deviation from Norges Bank’s 2.9% Y/Y CPI-ATE forecast may be required to motivate a material shift in market expectations. The base case amongst markets is for a cut in June or September, though a handful of analysts still project a March cut for now. A reminder that we will also recievie the February inflation report and the Q4 Regional Network Survey ahead of Norges Bank's March 26 decision.

• The median CPI-ATE forecast submitted to Bloomberg is 3.0% Y/Y, which would retain a 0.1pp forecast error between actual outturns and the December MPR projections. The vast majority of forecasts submitted to Bloomberg are in the 2.9-3.1% range. However, Morgan Stanley forecast a soft 2.7% Y/Y reading. This is a key pillar of their dovish Norges Bank rate view (including a March cut and a 3.25% year-end rate), which by extension factors into their FX strategist’s bearish NOK bias.
• Food inflation is expected to moderate a little in January, after rising notably to 4.94% Y/Y in December (vs 4.24% prior).
• Analysts note that rents are likely to see an increased weight in 2026. Rents have been one component keeping CPI-ATE inflation sticky over the past few years, so the higher weight may see this dynamic extend. However, we note that rent inflation did ease to 3.63% Y/Y in December (vs 3.72% prior).
• Weight and composition changes more generally add uncertainty to the January report, while Sweden’s soft flash inflation reading last week may add a downside risk.
• Headline inflation is expected at 3.0% Y/Y (vs 3.2% prior), above Norges Bank’s 2.7% projection owing to higher-than-expected electricity prices.