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The apparent success of vaccines at preventing severe illness and death from the Delta coronavirus variant should mean that it does not pose a major threat to recoveries in most advanced economies. However, the rapid spread of the Delta variant poses a …
14th July 2021
We expect some major central banks to issue digital currencies later this decade, with those in countries where cash is rarest proceeding the fastest. The first generation of central bank digital currencies (CBDCs) will be purposely designed not to shake …
6th July 2021
The dip in the global manufacturing PMI in June left it at a very high level, with the advanced economies leading a continued strong recovery in output. But industrial recoveries seem to have lost pace in Asia, reflecting a slowdown in demand for imports …
1st July 2021
High inflation has driven up rate expectations everywhere. But the inflation outlook is varied, and other aims will determine policy too. Norway and New Zealand will be first to tighten among DMs, others will delay. The rise in inflation and the question …
30th June 2021
April’s data revealed that world trade flows have enjoyed virtually interrupted growth for 12 months now, with world trade remaining well above its pre-virus level. But between the quintupling of shipping costs over the past year, supply disruptions, and …
25th June 2021
Inflation indicators in the flash PMIs for June reached new record highs and supplier delivery times lengthened still further. However, outside the US at least, there are few signs that goods shortages and higher costs have held back the recovery in …
23rd June 2021
Global Inflation Watch is our in-depth quarterly guide to how price pressures are developing across developed and emerging economies. This exclusive publication includes insight into how traditional sources of inflation are contributing to the current …
21st June 2021
Much of the rise in inflation in major advanced economies from February to May has reflected the fact that prices fell in the same period a year ago. That said, depending on how you measure it, around half of the jump in inflation in the US and UK over …
18th June 2021
Our Mobility Trackers show that global economic activity is benefitting from the removal of restrictions in advanced economies. Good progress with vaccinations suggests that this trend should continue, albeit with risks around new variants. The story is …
17th June 2021
Global GDP growth slowed sharply in Q1 as most parts of the world grappled with renewed waves of coronavirus. The US and Korea were among the few exceptions where recoveries accelerated. But with global infection numbers now falling, activity seems to be …
11th June 2021
A rise in inflation was always likely to happen this year as economies re-opened and energy prices recovered from last year’s sharp falls. But in the US in particular, the increase since the start of the year has exceeded even our relatively strong …
10th June 2021
The direct implications of this weekend’s deal on global corporate taxation struck by G7 finance ministers will be limited. But the deal suggests that wealthy nations have found renewed determination under a Biden presidency to cooperate on global issues, …
7th June 2021
The global manufacturing PMI held broadly steady in May as a sharp drop in India’s survey was offset by rises in other major economies whose recoveries appear to be continuing unabated. Meanwhile, goods shortages are exerting upward pressure on prices, …
1st June 2021
There are signs that countries whose rollouts are advanced have hit something of a limit, with the remaining population now reluctant to be vaccinated. But this will not necessarily prevent economies reopening once the vulnerable are vaccinated. Potential …
28th May 2021
The further rise in real trade in March suggests that external demand continued to recover, even as capacity constraints related to shipping were intensifying. And while shipping costs have risen and delays worsened in the weeks since these data were …
26th May 2021
The flash PMIs for May suggest that the recovery is well underway in those economies that are now on top of the virus. However, supply is still struggling to keep up with surging demand. And as well as exerting upward pressure on prices, there are some …
21st May 2021
While pay growth has risen across the developed economies, in several cases this reflects reduced hours or the fact that a disproportionate number of low paid workers have lost their jobs. There are clear signs of labour shortages in the US, but for now …
20th May 2021
Near-term inflationary pressures appear to be building. Some of this reflects factors that are likely to be only temporary, such as the “reopening inflation” associated with the easing of virus-related restrictions. We also think the broad-based rally in …
17th May 2021
We think that the broad-based rally in commodity prices will go into reverse later this year, so the upward pressure on inflation in advanced economies should be temporary. But there is a clear risk of a more sustained pick-up in inflation, especially if …
12th May 2021
Our Mobility Trackers suggest that global economic activity has continued to pick up and this positive trend should continue as vaccination programmes gather pace and there is a more widespread lifting of restrictions. That said, the surge in new cases in …
10th May 2021
In this Update , we outline the key data that will help us gauge the evolution of inflationary pressure in advanced economies as they open up. Pandemic-related distortions mean that it is particularly important to understand the detail to distinguish …
5th May 2021
The rise in the global manufacturing PMI suggests that the strong recovery in industrial production continued in April, but supply constraints are continuing to push up prices around the world. While the IHS Markit surveys are yet to provide evidence that …
4th May 2021
Policy stimulus and tolerance of inflation by central banks may lead to higher inflation in some G7 countries in the coming years. Given the parallels with the run-up to the high-inflation era of the 1970s, it is natural to be worried about history …
29th April 2021
Income support and limits on spending had already led households in advanced economies to build up almost $3.5tn in extra cash by the end of 2020, equating to 7.6% of GDP. And the stockpile of these supranormal savings will continue to grow in 2021. We …
26th April 2021
The blockage of the Suez Canal by the Ever Given container ship, which ran aground exactly one month ago, has had limited effects on shipping congestion and container freight rates worldwide. Meanwhile, data released today showed that world goods trade …
23rd April 2021
The advanced economy flash PMIs for April painted a positive picture, albeit with recoveries in the US and UK seemingly far outpacing those in the euro-zone and Japan as restrictions were relaxed in the former two economies. Input prices are still rising …
Table of Key Forecasts Global Overview – A rise in virus cases and some setbacks to vaccination programmes have pushed back the recoveries in some countries somewhat, but we still expect strong global growth of over 6% this year. The US will continue to …
The world economy lost considerable momentum in the first quarter as resurgences of the virus and tighter lockdown measures weighed on activity. The lesson from Q4 last year was that households and businesses have adapted to lockdown measures to a …
16th April 2021
A divergence between strong surveys and weak industrial ‘hard’ data, mainly in the euro-zone, has again raised questions about how to interpret the business surveys. There are several reasons why survey indices of output have overstated the actual …
13th April 2021
Mobility data have weakened in many parts of the world in recent weeks as virus numbers either remain high or continue to climb, risking restrictions staying in place for even longer. The latest data out of Israel suggest that its speedy vaccine rollout …
9th April 2021
While Asian goods exports have fared better than those from the rest of the world and especially those from advanced economies over the past year, this performance gap should narrow as economies reopen. Global goods trade continued its strong recovery at …
8th April 2021
The rise in March’s global manufacturing PMI suggested that world industrial production continued to recover. But the headline index masked a divergence at the country level, with sizeable gains in advanced economies offsetting small falls in major EMs. …
1st April 2021
Mandates have spread into equality, climate change and house prices in recent months Implications are mixed; Fed lower for longer, but RBNZ may need to hike sooner On average, mission creep points to more variable and probably higher future inflation …
29th March 2021
Data from the CPB Netherlands Bureau suggested that world trade had shrugged off rising shipping costs up to January, with real goods trade rising by 2.5% m/m. The outlook is broadly positive. But if the grounding of the huge container ship in the Suez …
25th March 2021
March’s advanced economy PMIs painted a positive picture, with headline indices typically now well into expansionary territory. Supply shortages are boosting prices and constraining output to some extent, especially in the US. And the euro-zone PMI is …
24th March 2021
Our Mobility Trackers suggest that the recent rise in coronavirus infections and associated restrictions are weighing on activity in Latin America, emerging Europe and the euro-zone. In contrast, mobility in the US has continued to recover as restrictions …
23rd March 2021
Table of Key Forecasts Overview – Inflation will rise sharply in every major economy in the months ahead, driven by a rebound in energy inflation, tax changes, and supply shortages. On average, CPI inflation in the advanced economies looks set to rise …
19th March 2021
The recent pick-up in consumer spending in DMs has been characterised by a sharp rise in spending on goods. The next leg of the recovery will be focused on services as restrictions are removed. Spending on consumer goods is likely to slow, implying weaker …
17th March 2021
Both the hard data and more timely surveys imply that the major advanced economies have had a mixed start to the year. The US has fared particularly well, thanks to easing pandemic-related restrictions and strong fiscal stimulus. Most notably, $600 …
11th March 2021
The global semiconductor shortage appears to be largely the result of a strong revival in demand for goods including consumer electronics rather than pandemic-related supply disruptions. It should generally have limited implications for GDP, but it could …
9th March 2021
While it is still early days, the ingredients for a sustained pick-up in inflation over the next few years seem to be falling into place in the US. It is a different picture in other developed economies; indeed, we still think that medium-term inflation …
2nd March 2021
February’s global manufacturing PMI survey painted a positive picture, implying that output growth has continued to accelerate outside China and that employment is picking up. Supply shortages are boosting input prices, especially in DMs, but this …
1st March 2021
While the latest signs are that capacity constraints in global shipping are continuing to bite, we expect these to subside over the course of the year. Indeed, as vaccine rollouts allow economies to reopen, the pace of the recovery in goods trade should …
26th February 2021
If passed in full, President Biden’s $1.9tn American Rescue Plan would constitute a fiscal stimulus worth 1.4% of global GDP, coming hot off the heels of the $900bn deal struck in December. While a boon for the US economy, we think that the economic …
24th February 2021
With vaccines improving the economic outlook and labour market data surprising to the upside, we have revised down our unemployment forecasts for almost all major economies. But wider measures of labour market slack imply a growing divergence by region. …
23rd February 2021
The batch of flash PMIs for February suggest that shipping constraints and some goods shortages are raising costs for manufacturers. There are some signs that these cost pressures are being passed on to consumers. Outside of the US, price pressures in …
19th February 2021
Taken alone, prolonged restrictions on international travel would do little to hinder the global recovery since overseas tourism is a small share of world GDP and some of the lost spending would be made up. But the aggregate masks a wide range of effects. …
18th February 2021
While new COVID-19 infections have dropped, our Mobility Trackers have shown only a slight pick-up in activity as tight restrictions remain in place in many economies. Vaccine rollouts have been slow in the euro-zone and most EMs, but much faster in the …
One legacy of the pandemic is a huge expansion in central banks’ balance sheets. Fears that this will automatically boost inflation are overdone. So, too, are worries that central banks will provoke a destabilising rise in bond yields by selling their …
17th February 2021
When analysing the effect of COVID-19 on business balance sheets, most attention is given to the surge in debt. But this ignores the fact that non-financial firms in DMs have built up a pile of excess cash worth $1.6tn (4% of GDP), so their balance sheets …
10th February 2021
