The latest data suggest that global GDP growth picked up to over 3% in Q3. World trade continues to shrug off US tariffs, global industry has been resilient, and lower interest rates have supported a recovery in credit growth in many cases. Meanwhile, the US economy continues to benefit from AI-related investment, and China’s economy was buoyed by stronger financial sector activity last quarter. That said, this is unlikely to mark the start of a sustained global upturn. Manufacturing order books signal slower trade and production, consumer confidence remains soft, and cooling labour markets will cause weaker growth in household incomes and ultimately consumption. By the same token, the uptick in global inflation in September is unlikely to herald a rebound. We generally expect inflation either to fall or be fairly stable in the year ahead, paving the way for additional central bank easing outside Japan.
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