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Our US Housing Market Chart Pack has been updated with the latest data and our analysis of recent developments. Conditions for would-be homebuyers and sellers will not improve much in the near term, with mortgage rates set to remain around 7% through the …
2nd December 2024
All-property values are down 18% from their mid-2022 peaks. And with appraisal-based cap rates still set to tick higher, we expect further small falls in values. That should take the peak-to-trough decline to over 20% by end-2025. At the sector level, we …
25th November 2024
Our ANZ Chart Pack has been updated with the latest data and our analysis of recent developments. The Antipodean central banks will tread different paths on policy over the forecast horizon. With the New Zealand economy in a tailspin and inflation well …
21st November 2024
Our new forecast that Bank Rate will fall slower and not as far means that we now think mortgage rates will decline from 4.4% in October to 3.9% by the end of 2026, rather than to 3.5%. But we still think that mortgage rates will fall by more than most …
20th November 2024
In response to Donald Trump’s election win and the likelihood that his policies will be inflationary, we have revised up our forecast for the terminal fed funds target range in 2025 by 50bp, to between 3.50% and 3.75%. There are, if anything, still some …
18th November 2024
Our Japan Chart Pack has been updated with the latest data and our analysis of recent developments. Wage growth is starting to outpace inflation and with real incomes rising, the rebound in consumer spending has further to run. With the Bank of Japan …
12th November 2024
The sharp decline in the 10-year Treasury yield in Q3 meant marked improvement in our property valuation scores. That left all-property looking “fairly valued” for the first time since the end of 2021. But the expected economic impact of a second Trump …
11th November 2024
Earlier interest rate cuts are yet to have much effect on the Canadian economy, which remains trapped in a period of below-potential growth. Making matters worse, any boost to the economy from lower borrowing costs next year will be countered by a decline …
5th November 2024
The net fiscal loosening of £36bn (1.1% of GDP) in 2029/30 relative to previous plans unveiled by the Chancellor in the Budget means we now expect GDP growth of 1.8% and 1.7% in 2025 and 2026 respectively, compared to 1.5% in both years previously. But …
Recessions fears continue to go unfounded, with the labour market still in good health after the strong September employment report. Prospects for October look weaker due to recent temporary disruptions but, with core inflation pressures heating up a …
17th October 2024
The latest data are consistent with our view that the world economy is in a soft patch. There are signs that global manufacturing is headed for recession and trade will soften. Consumers in DMs outside the US seem reluctant to spend, and banks in major …
10th October 2024
We think the Chancellor will raise taxes in line with the planned £16bn (0.6% of GDP) a year increase in public spending at the Budget on 30th October. The main influence of this will just be a rotation in the shape of GDP growth away from consumer …
9th October 2024
Wage growth is starting to outpace inflation and with real incomes rising, the rebound in consumer spending has further to run. While the Bank of Japan has become more concerned about a global economic slowdown, the domestic conditions would warrant …
8th October 2024
The economy is stuck in a period of below-potential GDP growth, with previous interest rate hikes weighing on consumer spending and investment. This will keep downward pressure on core inflation, which we expect will reach the Bank of Canada’s 2% target …
30th September 2024
We doubt the small fall in Nationwide house prices in August was the start of a renewed downturn. Surveys suggest the recent declines in mortgage rates have led to an increase in housing demand, while a significant near-term pick-up in supply appears …
17th September 2024
Global Economics Chart Pack (September 2024) …
12th September 2024
The economy looks to be entering a period of below-potential growth, characterised by excess supply in the goods and labour markets. This will keep downward pressure on core inflation, which we think will reach the Bank of Canada’s 2% target by the middle …
5th September 2024
Wage growth is starting to outpace inflation and with real incomes rising, the rebound in consumer spending has further to run. While underlying inflation will fall further below 2% over the coming months, we still expect the Bank to hike rates once more …
26th August 2024
The weaker July employment report and another set of mild inflation data mean the Fed remains on track to cut interest rates in September. With the activity data still supportive of our view that the economy is heading for a soft landing, we doubt the Fed …
19th August 2024
The recent drop in mortgage rates has caused house prices to rise a bit faster than expected. As a result, we now think house prices will grow by 2.0% y/y in Q4 2024 (1.0% previously). What’s more, our forecast that Bank Rate will be cut from 5.00% now to …
15th August 2024
Minimal movement in property yields and a slight edge up in the 10-year Treasury yield meant improvement in our property valuation scores stalled in the second quarter of the year. Despite the recent financial market turmoil, we still expect the 10-year …
While investment has tentatively turned a corner, subdued activity and further rises in cap rates mean 2024 will still be a tough year. All-property values are down by 18% from their mid-2022 peaks, but we expect the eventual peak-to-trough decline to …
14th August 2024
At its last policy meeting, the Bank of England still sounded a long way from being assured that inflation and wage growth will continue to ease. As a result, we doubt the recent moves in global financial markets will be enough to persuade the Bank to cut …
7th August 2024
With the economy now in a position of excess supply, we expect core inflation to continue to fall back to 2% by the middle of next year. With the Bank of Canada putting more emphasis on the downside risks to the economy, we expect the Bank to cut interest …
A pullback in buyer demand paired with rising supply has cooled the market, causing house price inflation to ease. However, the recent sharp decline in mortgage rates will offset some of that softness, by lifting demand from its current slump – providing …
6th August 2024
Following a wobbly period around the turn of the year, the economy is on the mend and should gather further momentum as real wage growth turns positive in the second half of the year. With goods inflation still having strong momentum, we now expect the …
25th July 2024
The recent set of mild inflation data and growing concerns among Fed officials about downside risks to the labour market reinforce our view that the first interest rate cut will come in September. We forecast that core PCE inflation will return to the 2% …
22nd July 2024
Global Economics Chart Pack (July 2024) …
15th July 2024
The latest data indicate that capacity pressures have continued to ease, a trend that should continue over the coming quarters. However, it will be a while before policymakers can be confident that they have broken the back of inflation. Accordingly, we …
Shipping costs have now risen far enough to start adding to global CPI inflation. However, so far, the boost to prices is probably only in the region of 0.1%, on average. What’s more, surging freight rates to some extent reflect a shift in demand towards …
10th July 2024
We expect that a sustained period of below potential growth will help bring core inflation to the 2% target by the end of the year and persuade the Bank of Canada to cut interest rates further, with the policy rate ending the year at 3.75% and settling at …
4th July 2024
The stronger-than-expected rebound in GDP in Q1 and the improving outlook for households suggests the next government, which the polls ahead of the election on 4th July imply will be a Labour one, will benefit from the economic recovery being a bit …
3rd July 2024
The stability of UK financial markets ahead of the UK general election is striking when compared to the sharp moves in French asset prices ahead of the French legislative elections. It’s probably because the UK election result isn’t in doubt and the …
27th June 2024
The recent encouraging inflation data reinforce our view that the Fed will cut interest rates in September. We remain confident that core inflation is heading back to the 2% target, which should allow the Fed to cut rates again in December and by even …
24th June 2024
While the economy has only narrowly avoided a recession, activity should rebound over coming quarters as real household incomes recover. Indeed, with inflation set to remain above the Bank’s 2% target this year and wage growth accelerating, we expect the …
18th June 2024
Global Economics Chart Pack (June 2024) …
12th June 2024
O ur Canada Chart Pack has been updated with the latest data and our analysis of recent developments. As the economy is set for a sustained period of below potential growth and core inflation is on track to return to the 2% target by the end of the year, …
10th June 2024
The stickiness of inflation in April has led us to shift back our forecast for the timing of the first interest rate cut from 5.25% from June to August. Even so, our view that CPI inflation will fall from 2.3% in April to below 1.5% by the end of this …
29th May 2024
Following the previous large quarterly increase, improvement in all-property valuations stalled in the first quarter of the year despite a rise in the 10-year Treasury yield. There was little change at the sector level. Industrial continued to look …
The tick up in mortgage rates since the start of the year has caused demand to soften. As a result, house prices are likely to tread water over the coming months. But our forecast that Bank Rate will be eventually be cut further than expected suggests …
Weak investment activity and continuing cap rate rises in Q1 fit with our view for another tough year for real estate. All-property values are now down by 17% from their mid-2022 peaks. But we still think cap rates need to climb by c. 80-100 bps to reach …
22nd May 2024
The slight easing of inflationary pressures in April and softer activity data are consistent with the Fed cutting interest rates in September. Although it is taking a little longer than expected, we believe that core inflation is on course to fall back to …
21st May 2024
20th May 2024
Global Economics Chart Pack (May 2024) …
15th May 2024
Mortgage rates climbed back above 7% last month but we think that trend will soon reverse, with rates falling to 6.5% by year-end. Lower borrowing costs will draw more mortgaged buyers into the market. But supply will remain tight as the fall in mortgage …
14th May 2024
Canada Chart Pack (May 2024) …
9th May 2024
While regular private sector wage growth in February and services CPI inflation in March were both a bit higher than the Bank of England had expected, we still think that the flatlining of the economy over the past two years will dampen price pressures …
8th May 2024
We think the Fed and most other developed markets (DM) central banks will be able to ease monetary policy this year and next more than investors currently anticipate. DM bond yields will end 2024 below their current levels, putting downward pressure on …
29th April 2024
House price growth in London remains negative according to the ONS, but timelier measures of house prices and sentiment suggest that activity has picked up and prices are regaining momentum. The recent slight increase in mortgage rates may temper the …
25th April 2024
