Rising energy prices will weigh on industrial production After euro-zone industrial production edged down in July, we expect the sector to continue to struggle over the coming months as the increase in EU natural gas prices gradually feeds through to …
16th September 2026
This page has been updated with additional analysis since first publication. Striking lack of any strengthening in domestic inflation We doubt that the combination of the rise in CPI inflation, from 2.9% in July to 3.1% in August (consensus 3.1%, CE …
Japan still paying premium to secure energy supply Japan’s crude oil import volumes held up well in August but importers are still paying a premium to secure sufficient crude oil supplies outside of the Middle East. Taking exports first, the 19.3% annual …
House prices to fall a bit further Higher borrowing costs took some momentum out of the housing market in August. We expect this to continue to halt the nascent recovery over the coming months. Home sales fell by 0.7% m/m in seasonally adjusted terms, …
15th September 2026
Overview – Emerging Europe has weathered the energy shock well so far and we expect regional GDP growth to strengthen in 2027. We remain upbeat on Poland and Czechia, but more cautious than the consensus on Russia, Romania and Turkey. Monetary policy …
While renewed enthusiasm for AI or a substantial retreat in US Treasury yields could breathe fresh life into the S&P 500, neither is looking very likely at the moment. That’s making us less confident in our forecast that it will reach 8,250 by end-2026. …
Weaker-than-expected inflation unlikely to prompt rate cut next week Nigeria’s headline inflation rate was unchanged at 15.4% y/y in August, which keeps the door ajar for a rate cut next week. But we think credibility concerns will win out, and the MPC …
EM growth appears to have softened at the start of Q3, but we still think it will accelerate in the coming quarters. As things stand, it doesn’t look like EM central banks will respond to the renewed rise in energy prices as well as interest rate hikes in …
Growth in output and productivity in the euro-zone’s information and communication sector is very strong by historical standards, no doubt reflecting the impact of AI. However, so far there is no clear sign of an AI effect in other parts of the economy. …
We think the underperformance of the European stock market relative to that of the US in recent years will reverse over the medium term as the AI-fuelled equity boom soon turns to bust. The European stock market has lagged the US stock market since the …
The disruption to energy flows from the Iran war will cause government budget balances to improve in Oman and the UAE (high prices have more than offset the impact on export volumes). But balances will probably deteriorate by ~2% of GDP in Saudi Arabia, …
This report is part of our new series on China Shock 2.0. Explore the series and follow the latest publications on this dedicated page . China’s export surge is strengthening rather than hollowing out South East Asian manufacturing. Cheaper inputs and …
We now expect the price of Brent crude oil to remain high throughout this year, which means that fiscal measures to cap retail energy prices will cost an additional 0.6% of GDP this year. And with the government pressing ahead with its plan to reduce the …
This page has been updated with additional analysis since first publication. Labour market still not supportive of second-round inflation effects The further weakening in labour activity in August lends some more support to our view that second-round …
Industry rebounds but domestic demand still soft August activity data showed a modest rebound in industrial output growth last month, driven by external demand and high-tech manufacturing. A smaller contraction in infrastructure investment suggests that …
The US corporate profit share has climbed to historic highs, mainly due to soaring profitability in AI-related technology sectors. But history suggests that such rapid gains in margins are difficult to sustain when profit shares are already elevated, …
14th September 2026
The main cause of Italy’s strong recovery from the pandemic was exceptionally loose fiscal policy. This fiscal stimulus has been scaled back over the past few years and growth has returned to a slow pace. Looking ahead, further fiscal tightening is …
Strengthened core price pressures make rate hike more likely The second consecutive firm rise in core price pressures in August, coming against a backdrop of surging oil prices, means it now looks increasingly likely the Bank of Canada will follow other …
The rise in the price of oil to over $100 per barrel is the last thing central banks across the advanced economies want to see. The European Central Bank met last week and raised interest rates by 25 basis points, citing upward revisions to inflation …
The attack on Saudi Arabia’s East-West pipeline could impact up to 4% of global oil supply and each week of the pipeline’s closure could knock up to 0.3%-pts off Saudi Arabia’s GDP. Uncertainty about the length of the closure means that we’re not changing …
There are plenty of signs that we are now in the late stages of a bubble in AI . When the bubble eventually bursts, we expect the subsequent fallout to include not only very substantial drops in equity markets, but also modest rallies in some sovereign …
India’s headline consumer price inflation jumped to a 20-month high of 4.8% y/y in August and further rises are going to follow, with the renewed surge in oil prices a stark reminder that the risks are heavily stacked to the upside. As such, we remain …
Household borrowing sinks further Growth in broad credit slowed to a fresh record low, reflecting weaker growth in both bank and non-bank financing. Most concerning is the continued weakness in household credit demand, with household borrowing still …
Indonesia’s decision today to replace Finance Minister Purbaya Yudhi Sadewa with his deputy is a welcome development, although we need more evidence of improvements in policymaking before we are convinced that Indonesia has truly turned a corner. Purbaya …
We don’t expect the Fed to add much fuel to the bond market sell-off later this week, but over the medium term we nonetheless think the relative monetary policy picture favours the US dollar, especially over the euro and the pound. Fed hike not the …
Net lending by banks to commercial real estate excluding farms recovered to $8.3bn in August, from $4.6bn in July. That’s in line with the average over the past year of $8.4bn. Within the total, net lending on multifamily assets saw a $2.9bn increase, …
11th September 2026
Our initial reaction to the August consumer price data published today was understandably centred on what it meant for next week's September FOMC meeting. In short, together with the PPI data, they pointed to another above-target 0.27% m/m rise in the …
While the US CPI data for August released today could have been worse, the combination of strong economic growth, above-target underlying inflation and the recent surge energy prices means that we now once again expect the FOMC to raise its policy rate …
Sharp drop in exports ahead of Trump-Xi meeting When President Xi last met President Trump, in Beijing in May, China committed – according the White House – to “ address US concerns regarding supply chain shortages related to rare earths and other …
Mexico’s AI exports boom (further) The US ITC’s updated goods imports data for July confirmed that the boom in Mexico’s exports that month was driven by integration into AI hardware supply chains. US imports of advanced servers and GPUs (driven by the AI …
Trump’s import ban unlikely to be the last word The counter-tariffs imposed on some imports from the US on Tuesday were quickly met with another round of retaliation from the Trump administration, which is set to impose a complete ban on some imports from …
SA current account to remain under pressure South Africa’s current account swung into deficit in Q2 on the back of higher energy imports. Elevated metals prices have cushioned the external position but, with oil prices back above $100pb, we expect it to …
Student accommodation yields have seen a relatively large 50bps increase over the past year. That looks to reflect a sharp drop in rental growth expectations, which in turn looks due to a renewed drop in foreign student numbers. Our new forecasts …
Firm CPI and PPI data point to another above-target-consistent gain in core PCE Warsh should face little in the way of pushback for a hike this month New SEP likely to show three hikes as the median The firm August price data means we are re-instating …
NBP under no pressure to raise rates Poland’s central bank (NBP) left interest rates on hold again at 3.75% this week and while the debate has recently shifted towards the possibility of interest rate hikes, the central bank’s communications suggest it is …
Overview – The recovery in energy exports from the Middle East will take longer than we previously expected and is consistent with continued draws on global oil stocks as well as a further tightening in natural gas markets over the northern hemisphere …
Time for Warsh to walk the walk The upside surprise to core CPI in August will result in another above-target-consistent gain in the core PCE deflator and means the Fed should hike next week. The 0.3% m/m rise in core CPI was stronger than the consensus …
The long-run impact of the AfD’s victory in Saxony-Anhalt and the prospect of it doing well in state elections on 20 th September are not likely to be positive, for three key reasons. First, the Saxony-Anhalt election may result in the federal …
Won rally not over yet The Korean won hit a two-year high of 1,340 against the dollar this week, marking a sharp turnaround from the 17-year low of nearly 1,560/$ it hit in June. (See Chart 1.) As outlined here , the won’s rebound is not a surprise given …
We'll be discussing the Brazil’s election in a Drop-in on Thursday, 24th September. Register here. Door stays open for a rate cut next week The slightly larger-than-expected fall in Brazilian inflation to 4.2% y/y in August was driven by a temporary drop …
Three recent developments have reduced our confidence in our forecast that the Bank of England won’t raise interest rates. First, the recent rises in energy prices have led us to revise up our CPI inflation forecast. We now think CPI inflation will rise …
Of course, there’s nothing economically significant about the $100pb barrier through which Brent crude passed through again this week. After all, given the blowout in oil product spreads, the prices of petrol and diesel have frequently traded at the …
Fundamentals reassert themselves Price pressures in Japan are not fading away. While we learnt today that producer prices fell 0.2% m/m in August, that decline was driven entirely by energy-related components and agricultural products. Our measure of …
Surge in inflows creates new headache for RBI The RBI’s efforts to bolster inflows by absorbing the cost of foreign-currency, non-resident (FCNR) deposits has proven very successful, but has also created a new problem for the central bank. To recap, with …
This page has been updated with additional analysis since first publication. AI-related activity contributing to continued resilience The strong 0.4% m/m rise in real GDP in July (consensus and CE forecasts both 0.0%) suggests that the resilience of the …
September hike, then a long pause Australian monetary policymakers stuck to their hawkish script this week. At a fireside chat on Tuesday, RBA Assistant Governor Sarah Hunter highlighted growing upside risks to inflation, noting that oil prices are …
Bank has signalled a rate hike in September due to mounting upside risks to inflation Sales tax cut muddying the inflation outlook, but underlying inflation will remain strong Bank will continue to tighten rapidly; policy rate will reach 2% by mid-2027 …
Overview – Tight fiscal stances, deteriorating terms of trade and weakening labour markets mean that Latin American economies will continue to struggle and we think regional growth will come in below 2% in the coming years; consensus forecasts are for …
10th September 2026
