Chief Economist's Note Group Chief Economist Neil Shearing gives his weekly take on the big issues in the global economy and highlights key analysis and events from Capital Economics The Chief Economist's Note Global food supply shock raises inflation stakes Energy prices are dominating the headlines, but the current inflationary surge is also about what’s happening with global food supplies. We estimate that higher food prices have accounted for about... 13th June 2022 The Chief Economist's Note The not-so-good, the bad and the ugly: the outlook for the world’s big three economies We’ve spent a long time arguing that the global economy faces a more difficult outlook than most expect. The consensus is now moving towards our view as evidence of weakness mounts. But, amid the... 31st May 2022 The Chief Economist's Note Whipping inflation doesn’t necessarily require a recession – but some may not get a choice A debate is raging among market participants about whether inflation has accelerated to such an extent that a recession has now become necessary in order to bring it back down. As we explained in a... 23rd May 2022 The Chief Economist's Note In this new age of uncertainty, central banks should double down on inflation targeting 25 years ago this month the Bank of England was granted operational independence by the then-Chancellor Gordon Brown. Uncomfortably for current members of the Monetary Policy Committee, the... 16th May 2022 The Chief Economist's Note China’s economic challenges won’t stop with defeating Omicron All three of the world’s major economic blocs are now facing significant headwinds. In the US, these stem from an increasingly hawkish Federal Reserve, while the euro-zone faces pressure from a huge... 3rd May 2022 The Chief Economist's Note From ‘Roaring’ to ‘Recessionary Twenties’ – how convincing is the market’s latest story? Financial markets love a good story. Twelve months ago, the dominant narrative was that we were heading into another “Roaring Twenties”, with the global economy set to see years of above-trend growth... 25th April 2022 The Chief Economist's Note Reports of the dollar’s demise are (still) greatly exaggerated The debate about the role of the dollar in the global economy is an old one. Over the years it’s been given fresh life by events including the creation of the euro, China’s rise and the Global... 4th April 2022 The Chief Economist's Note EM crises are old news – today’s risks from higher rates lie in housing In justifying his dissenting call for a 50-basis point hike at the Federal Reserve’s March meeting, St Louis Fed President James Bullard cited the experience of the 1994 tightening cycle, arguing that... 28th March 2022 The Chief Economist's Note Damned if they don’t – central bank tightening risks recession but inaction would be worse The key message to come from meetings of the Federal Reserve and Bank of England last week, and the European Central Bank the week before, was that the war in Ukraine has not deterred central bankers... 21st March 2022 The Chief Economist's Note Central banks will press on with rate hikes, despite the war’s uncertainties Just a few weeks ago, central bankers were grappling with the considerable challenge of maintaining post-pandemic recoveries in the face of a generational surge in inflation. Now, against the backdrop... 14th March 2022 The Chief Economist's Note Russia’s economy is already hurting from Western sanctions. Worse is to come. Vladimir Putin believes Western sanctions are “akin to a declaration of war”. The Russian President’s reported comment gives a sense of his outrage at the punitive response to his invasion of Ukraine... 7th March 2022 Chief Economist's Note China is one of globalisation’s winners. It won’t throw that away for Russia. Amid the outpouring of punditry which has followed the start of war in Ukraine is the idea that this conflict is a manifestation of the fracturing of the global political and economic order. On one... 28th February 2022 The Chief Economist's Note We need to talk about QT The debate about how quickly and how far central banks should raise interest rates has intensified in recent weeks, but relatively little attention has been paid to the role that quantitative... 21st February 2022 The Chief Economist's Note Navigating the path back to normal As central banks in advanced economies begin to tighten policy, two questions hang over financial markets: how quickly will policymakers increase interest rates and how far might rates ultimately need... 14th February 2022 The Chief Economist's Note How policy makers should – and shouldn’t – tackle the energy price inflation shock Another week, another set of inflation figures to dial up the pressure on central banks. This time it was the ECB’s turn to feel the heat, with flash data showing that inflation hit 5.1% y/y in... 7th February 2022 The Chief Economist's Note Look to labour markets for clues about the future path of inflation and interest rates Last week I offered a post-mortem on inflation’s dramatic return and argued that the key question now was whether it would spread from energy and core goods to other areas of the economy, particularly... 31st January 2022 Pagination Previous … Page 5 Page 6 Page 7 Page 8 Current page 9 Page 10 Page 11 Page 12 Page 13 … Next
The Chief Economist's Note Global food supply shock raises inflation stakes Energy prices are dominating the headlines, but the current inflationary surge is also about what’s happening with global food supplies. We estimate that higher food prices have accounted for about... 13th June 2022
The Chief Economist's Note The not-so-good, the bad and the ugly: the outlook for the world’s big three economies We’ve spent a long time arguing that the global economy faces a more difficult outlook than most expect. The consensus is now moving towards our view as evidence of weakness mounts. But, amid the... 31st May 2022
The Chief Economist's Note Whipping inflation doesn’t necessarily require a recession – but some may not get a choice A debate is raging among market participants about whether inflation has accelerated to such an extent that a recession has now become necessary in order to bring it back down. As we explained in a... 23rd May 2022
The Chief Economist's Note In this new age of uncertainty, central banks should double down on inflation targeting 25 years ago this month the Bank of England was granted operational independence by the then-Chancellor Gordon Brown. Uncomfortably for current members of the Monetary Policy Committee, the... 16th May 2022
The Chief Economist's Note China’s economic challenges won’t stop with defeating Omicron All three of the world’s major economic blocs are now facing significant headwinds. In the US, these stem from an increasingly hawkish Federal Reserve, while the euro-zone faces pressure from a huge... 3rd May 2022
The Chief Economist's Note From ‘Roaring’ to ‘Recessionary Twenties’ – how convincing is the market’s latest story? Financial markets love a good story. Twelve months ago, the dominant narrative was that we were heading into another “Roaring Twenties”, with the global economy set to see years of above-trend growth... 25th April 2022
The Chief Economist's Note Reports of the dollar’s demise are (still) greatly exaggerated The debate about the role of the dollar in the global economy is an old one. Over the years it’s been given fresh life by events including the creation of the euro, China’s rise and the Global... 4th April 2022
The Chief Economist's Note EM crises are old news – today’s risks from higher rates lie in housing In justifying his dissenting call for a 50-basis point hike at the Federal Reserve’s March meeting, St Louis Fed President James Bullard cited the experience of the 1994 tightening cycle, arguing that... 28th March 2022
The Chief Economist's Note Damned if they don’t – central bank tightening risks recession but inaction would be worse The key message to come from meetings of the Federal Reserve and Bank of England last week, and the European Central Bank the week before, was that the war in Ukraine has not deterred central bankers... 21st March 2022
The Chief Economist's Note Central banks will press on with rate hikes, despite the war’s uncertainties Just a few weeks ago, central bankers were grappling with the considerable challenge of maintaining post-pandemic recoveries in the face of a generational surge in inflation. Now, against the backdrop... 14th March 2022
The Chief Economist's Note Russia’s economy is already hurting from Western sanctions. Worse is to come. Vladimir Putin believes Western sanctions are “akin to a declaration of war”. The Russian President’s reported comment gives a sense of his outrage at the punitive response to his invasion of Ukraine... 7th March 2022
Chief Economist's Note China is one of globalisation’s winners. It won’t throw that away for Russia. Amid the outpouring of punditry which has followed the start of war in Ukraine is the idea that this conflict is a manifestation of the fracturing of the global political and economic order. On one... 28th February 2022
The Chief Economist's Note We need to talk about QT The debate about how quickly and how far central banks should raise interest rates has intensified in recent weeks, but relatively little attention has been paid to the role that quantitative... 21st February 2022
The Chief Economist's Note Navigating the path back to normal As central banks in advanced economies begin to tighten policy, two questions hang over financial markets: how quickly will policymakers increase interest rates and how far might rates ultimately need... 14th February 2022
The Chief Economist's Note How policy makers should – and shouldn’t – tackle the energy price inflation shock Another week, another set of inflation figures to dial up the pressure on central banks. This time it was the ECB’s turn to feel the heat, with flash data showing that inflation hit 5.1% y/y in... 7th February 2022
The Chief Economist's Note Look to labour markets for clues about the future path of inflation and interest rates Last week I offered a post-mortem on inflation’s dramatic return and argued that the key question now was whether it would spread from energy and core goods to other areas of the economy, particularly... 31st January 2022
