Net lending by banks to commercial real estate jumped to $13.8bn in November, the strongest monthly outturn since February 2023. That followed a strong month for net lending in October, and as a result outstanding CRE debt held by commercial banks climbed …
12th December 2025
AI boom continues in ICT services sectors Usually the quarterly services survey data is not available before the initial GDP release, but that’s not the case for the shutdown-delayed third quarter. The QSS report, released to little fanfare this …
The Bank of Canada kept its policy rate at 2.25% this week, wrapping up a year in which it has cut interest rates by a cumulative 100bp. The Bank seems content, barring a shock, to leave the policy rate at the bottom of its 2.25% to 3.25% neutral range …
Unlike the rout this spring, the latest sell-off in JGBs seems to have been mainly driven by a more hawkish assessment of Bank of Japan (BoJ) policy across the curve. We forecast the 10-year yield to rise to 2.5% by end-2027, but don’t think this will …
Shilling stability starting to startle Kenya’s central bank cut interest rates by another 25bp this week, to 9.00%, but the extent of further monetary loosening is likely to rest on what happens next with the shilling. The decision itself was not a major …
Colombia’s debt problems back in the spotlight Colombian President Petro was dealt a blow this week as the senate’s economic committee rejected his tax bill that was intended to raise COP16.3trn (c.1% of GDP) via tax hikes to finance the 2026 budget. It’s …
We’ll be discussing the outlook for Bank of England, Fed and ECB policy in a 20-minute online Drop-In at 3pm on 18th December (register here ). At this time of year it is useful to look back at how your forecasts have done and to learn from any mistakes …
In this special episode of The Weekly Briefing podcast, Group Chief Economist Neil Shearing and Chief Global Economist Jennifer McKeown outline Capital Economics' expectations for 2026. They tackle the key drivers and risks in the year ahead, examining …
For all the focus on gold’s record-breaking run this year, silver has outperformed and has risen by 120% year-to-date. Gold’s often-overlooked ‘cousin’ reached an all-time high of ~$64 per oz this week. Some analysts have pinned the rally on structural …
Weaker rupee unlikely to pose a major macro threat This week we published our India Economic Outlook for Q1 2026, which contains all of our latest analysis and forecasts for India’s economy and financial markets. One key call is that the RBI will deliver …
The December IPF consensus survey forecasted all-property total returns of 7.8% p.a. over 2025-29, more-or-less unchanged from September. Indeed, the total return forecast has been stable for all of 2025. By contrast, thanks to an upward revision in our …
Is investor optimism justified? Market moves over the past fortnight show that investors are becoming more optimistic about the euro-zone economy. Interest rate expectations and bond yields have risen, inflation swap rates have increased, and equities …
Public debt is not a cause for worry Prime Minister Sanae Takaichi has cleared the first parliamentary hurdle in passing her stimulus package , with the lower house approving the supplementary budget yesterday. Although the ruling coalition lacks a …
Ukraine’s friends are wavering There has been further wrangling within the EU about how to provide support for Ukraine ahead of the EU leaders’ summit on 18 th December. The “reparations loan”, which leverages immobilised Russian assets, remains the …
Inflation has bottomed out but the rise to 4% will be gradual The November data confirm that headline inflation in India has bottomed out. But we think the rise back up to the RBI’s 4% target will be a gradual one. That leaves scope for the central bank …
Chip supply bottleneck set to ease The boom in AI capex has had a large impact on the trajectory of US economic growth this year. By contrast, it is hard to find evidence of any dramatic impact on the Chinese economy. To be sure, the contribution to GDP …
Bank lending continues to slow Credit data for November showed net new financing more than doubling. But that mostly reflects the usual seasonal pattern. To iron out that seasonality, we prefer to look at growth in outstanding credit growth. On that …
BoT to resume easing cycle The Bank of Thailand kept its policy rate unchanged at its October meeting but appears likely to resume its easing cycle at its meeting next week. The primary concern for policymakers is the weakness in economic activity …
We’re hosting a 20-minute online briefing at 3pm GMT on Thursday 18 th December on the latest central bank decisions and 2026 policy outlook. (Register here .) This page has been updated with additional analysis since first publication. Contraction …
Capacity pressures remain high The RBA made no bones about its tightening bias when it left rates on hold this week . Indeed, Governor Bullock said that the only question for the Board was whether it would leave rates on hold for an extended period or …
Ueda signals December rate hike as uncertainty over US tariffs has diminished Government subsidies will push headline inflation below 2% next year However, persistent strength in underlying inflation will prompt further tightening The Bank of Japan will …
With our 10-year gilt yield forecast unchanged and the impact of changes to business rates broadly revenue neutral over the next five year years, we are not changing are commercial property forecasts following the Budget. That said, with the Chancellor …
11th December 2025
Trade deficit narrows, with net trade providing big boost to Q3 GDP The trade deficit narrowed markedly to $52.8bn in September, from $59.3bn, as exports increased by 3.0% m/m, easily outpacing a 0.6% m/m gain in imports. It now appears that third-quarter …
A close 5-4 vote to cut rates from 4.00% to 3.75% in December MPC may slow the pace of rate cuts in the first half of 2026 But we still think the BoE will cut rates by more than most expect, to 3.00% We think the balance will tip in favour of a 25 basis …
We expect GDP growth to average around 1% annualised over the next four quarters as household spending, investment and exports all remain subdued, while the latest budget won’t provide much short-term stimulus. However, the labour market outlook has …
Overview – The recovery in European commercial property values is slowing and we think this will continue as soft economic growth weighs on rents and elevated interest rates limit yield-driven capital gains. Near-term strength in prime rents will support …
The readout from China’s Central Economic Work Conference suggests that monetary and fiscal policy will remain supportive next year but that any additional easing will be modest. Instead, the focus appears to be on making better use of government spending …
The Riksbank will keep the policy rate at 1.75% next week and will probably leave its forward guidance unchanged, saying that it will maintain the current policy rate for some time to come. Norges Bank will also leave its policy rate unchanged, at 4%, but …
The SNB shrugged off lower-than-expected inflation and kept faith that its zero interest policy rate will be sufficient to boost inflation in the medium term. We think it will be less relaxed next year, when we expect inflation to average just zero, and …
CBRT delivers a bigger cut, but communications hawkish The decision by the Turkish central bank (CBRT) to accelerate the pace of its easing cycle today with a 150bp cut to its one-week repo rate, to 38.00%, was accompanied by relatively hawkish …
Investors’ interest rate expectations have risen… … but ECB will leave rates unchanged next week and reiterate neutral stance. And we think the ECB’s next move is more likely to be a cut. Stronger-than-expected economic data and recent comments by …
Egypt’s external strains to ease further The IMF is in Cairo and, unsurprisingly, Egyptian officials are stepping up their efforts to jumpstart the privatisation programme in order to keep the Fund happy. That said, further signs of improvement in Egypt’s …
SNB unfazed by zero inflation for now, but will cut next year The SNB shrugged off lower-than-expected inflation in the fourth quarter and kept its policy rate at zero. However, we think it will be less relaxed next year, when we expect inflation to …
More easing on the cards as corruption scandal weighs on the economy The Bangko Sentral ng Pilipinas (BSP) lowered its reverse repo rate by a further 25bps today (to 4.50%) and, with the ongoing corruption scandal likely to continue to weigh on economic …
No signs of a post-Budget bounce in buyer sentiment Despite three quarters of the survey responses being gathered after the Budget, November’s RICS survey suggests buyer sentiment fell further in November even though actual housing activity and prices …
Our base case remains that Treasury yields will rise and the US dollar will rally in 2026, as the Fed delivers just one more cut. But Wednesday’s meeting highlighted some of the risks to that view. At face value, the Fed’s cut could have been construed as …
Despite the pullback in employment, labour market conditions remain firm Although the weak November jobs report muddies the waters for the RBA, there are few indications that the labour market is falling off a cliff. Given its concerns about inflation …
Hawkish BCB leaves January rate cut in doubt Brazil’s central bank continued to strike a hawkish tone as it left interest rates on hold again at 15.00% today. There was little in the statement to suggest that policymakers are preparing for a rate cut in …
10th December 2025
The FOMC overcame its divisions to vote for another interest rate cut today, albeit with three dissenting votes. The hawks influenced the accompanying policy statement, which notes that the FOMC will now consider both “the extent and timing” of additional …
Fed softens blow of hawkish cut with decision to resume asset purchases The FOMC overcame its divisions to vote for another interest rate cut today, albeit with three dissenting votes. The hawks on the Committee had a clear influence on the accompanying …
Overview – Economic growth will remain subdued over the next two years as the largest economies struggle and the smaller ones outperform. Past ECB interest rate cuts will do little to boost activity because private sector borrowing costs have not …
The Bank of Canada kept its key policy rate at the bottom of its 2.25% to 3.25% neutral range estimate today, as expected. While there was recognition from policymakers that the labour market had performed better recently, this was not enough to change …
Following a likely 60,000 slump in October, as more than 100,000 workers dropped off the federal payroll, we estimate that non-farm payrolls rebounded by 50,000 in November. We expect the unemployment rate was 4.4% in November, unchanged from September. …
Bank acknowledges improved outlook but tempers hike expectations The Bank of Canada kept its key policy rate at the bottom of its 2.25% to 3.25% neutral range estimate today, as expected, while acknowledging that the economic outlook has improved somewhat …
Concerns about a stock market bubble are unlikely to dictate central banks’ interest rate decisions in the near term. It’s difficult to call a bubble and even harder to manipulate stock markets without unwanted side effects. Like the dotcom bubble, the …
Falling inflation leaves a January rate cut finely balanced The drop in Brazilian inflation to 4.5% y/y in November won’t prompt an interest rate cut at the central bank’s meeting later today (we expect the Selic rate to stay at 15.00%). But it does …
10-year Treasury yields have risen in recent weeks despite investors moving to price in a rate cut today. One reason for that seems to have been an increase in the term premium, and we expect this component to remain volatile over the coming year. It …
The Saudi economy has been boosted by the unwinding of oil output cuts this year and this will continue over the coming quarters, but a step up in fiscal consolidation efforts means that overall GDP growth is likely to come in weaker than most anticipate …
