We expect growth in almost every major economy to slow next year, with the US and China in particular falling some way short of current expectations. At the same time, while headline inflation will drop sharply, core inflation will remain higher than most anticipate in a number of countries. This will pose a dilemma for policymakers. We expect most central banks to tighten policy next year, but in some cases (though notably not the US) the pace of tightening will be a bit slower than investors currently anticipate. China is likely to be one of the few countries in which interest rates are cut.
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