Next week could be a pivotal one for the global economy, with interest-rate decisions from the Fed and ECB alongside a challenging UK Budget.
In this episode of The Weekly Briefing, Chief UK Economist Paul Dales is joined by Chief Global Economist Jennifer McKeown to explain what to expect and where the biggest risks lie. They discuss why the Fed is likely to pause next week but resume raising rates from December, and what to listen for from Fed Chair Kevin Warsh as inflation pressures remain uncomfortably strong.
They also explain why the ECB faces a rather different inflation problem and why its tightening cycle may be close to an end. And with central bankers increasingly reluctant to commit themselves to a particular path for rates, they ask whether forward guidance is really dead, and how investors should interpret the signals coming from the Fed and ECB next week. Finally, with the UK Budget looming, they consider the difficult balancing act facing the Chancellor as he seeks to ease cost-of-living pressures without unsettling already-nervous bond markets.
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