Filtered by Topic: Monetary Policy Use setting Monetary Policy
The Q2 GDP figures out so far point to robust growth across much of the emerging world, but we think growth will soften over the second half of the year. While growth across much of Asia will exceed consensus expectations, we think growth will disappoint …
14th August 2025
The economy has mostly held up against US tariffs so far, thanks largely to resilient consumer spending. But exports have weakened, and investment is showing signs of slowing. With the upcoming USMCA renegotiation set to prolong trade uncertainty, both …
Economic growth has been fairly resilient to tariffs so far and, as long as tariffs stay around the 15% agreed in the EU-US trade deal, the hit to activity should be small. But growth will be sluggish this year as low confidence and slowing income growth …
7th August 2025
Despite the unexpected rise in CPI inflation in June, we still think the weakness in the labour market means it’s only a matter of time before wage growth and inflation slow to rates consistent with the 2% inflation target. We think the Bank of England …
6th August 2025
China Chart Pack (Jul. 25) …
31st July 2025
Africa Chart Pack (Jul. 2025) …
30th July 2025
Our View: The EU-US trade agreement, which will impose a 15% tariff on most EU goods exports to the US, will deal only a small hit to GDP growth across Central and Eastern Europe. With inflation pressures in parts of the region likely to remain strong …
29th July 2025
The latest data suggest that global industry has been resilient to tariffs so far this year. But global trade softened in May and the latest surveys point to further weakness to come. Consumer spending remains subdued in most advanced economies. And …
President Trump’s tariff threats this month put Latin America in the firing line, in stark contrast to Liberation Day when the region was largely unaffected. Taken together with headwinds from tight policy and lower commodity prices, growth is likely to …
India’s economy has had a strong first half of the year and is poised to grow by 7% in both 2025 and 2026, making it a global outperformer. While inflation has continued to fall sharply, we expect it will rise steadily towards the RBI’s 4% target over the …
24th July 2025
Australia’s economy is struggling to gain momentum, while the recent rebound in activity in New Zealand increasingly looks like a false start. As the lull in activity lifts spare capacity, underlying price pressures should continue to ease in both …
Japan’s economy has largely shrugged off global trade tensions and the trade deal reached between the US and Japan has removed a key downside risk. With inflation set to keep overshooting the Bank of Japan’s forecasts, we expect the Bank to resume its …
23rd July 2025
Oil prices have fallen back in the wake of the Israel-Iran ceasefire and, with more oil supply coming online, we think that prices will decline further. Fiscal policy in the Gulf will become less supportive as a result, weighing on activity in non-oil …
22nd July 2025
Tariff negotiations rumble on, but our base case remains that the tariffs ultimately imposed will not cause a recession – though we expect growth to slow. We forecast GDP growth of 1.6% this year and 1.5% in 2026. Price effects have been limited so far, …
17th July 2025
The economy faces a prolonged period of weak growth as US tariffs and uncertainty over the future of the USMCA weigh on exports and investment. We forecast quarterly GDP growth at or below 1% annualised over the rest of the year. Canada’s retaliatory …
The early evidence suggests that EM exports have held up well, despite higher US tariffs. That’s partly because exporters have front-loaded shipments to the US or (in China's case) have avoided high tariffs by shipping via third countries. So long as this …
We think the euro-zone economy will not grow at all in Q2 and Q3 as the first-quarter boost from tariff front-running will not be repeated. Looking through the tariff disruption, growth will be sluggish as consumer confidence is low and investment likely …
8th July 2025
China Chart Pack (June 25) …
27th June 2025
India’s economy has had a strong first half of the year and is poised to grow by 7% in both 2025 and 2026, making it a global outperformer. The recent sharp drop in inflation has enabled the Reserve Bank of India to frontload its easing cycle and we think …
26th June 2025
The US-brokered Iran-Israel ceasefire has allayed fears of the conflict spilling over into the Gulf and concerns about a closure of the Strait of Hormuz have diminished. This has eased the risks to the Gulf’s capacity to ship oil to market, but it has …
Our View: Emerging Europe is less vulnerable than other EM regions to higher US import tariffs, but we have still recently nudged down some of our GDP growth forecasts for this year. Monetary policy will be eased slightly more quickly than we previously …
Africa Chart Pack (Jun. 2025) …
25th June 2025
The latest data suggest that the boost to industry and trade from businesses front-running US tariffs is over. Manufacturing activity softened in April and May, and new orders have weakened. While consumer confidence has partially rebounded from …
24th June 2025
We assume that the 90-day pause on reciprocal tariffs is mostly extended, keeping tariffs at 10% for countries except China, which will face a steeper 40% levy. Tariffs will not cause a recession – provided Congress can quickly redirect the tariff revenue …
23rd June 2025
20th June 2025
Mexico has weathered the US’s shift toward protectionism better than many feared just a few months ago, but the economy is still likely to struggle this year. While the rest of the region is relatively insulated from the trade war, lower commodity prices …
17th June 2025
Canada Chart Pack (June 2025) …
11th June 2025
Euro-zone GDP rose strongly in Q1 but the economy will struggle in the rest of this year as tariff front-running ends and higher US tariffs start to weigh more heavily on activity. Increased defence and infrastructure spending will then support GDP growth …
10th June 2025
We'll be discussing the outlook for UK fiscal policy and the wider economy shortly after the Chancellor's Spending Review is released in a 20-minute online Drop-In at 3pm BST on Wednesday 11th June. (Register here .) The strong start to the year shouldn’t …
4th June 2025
China Chart Pack (May 25) …
30th May 2025
The latest data confirm that the world economy got off to a weak start this year. World trade has been one bright spot, as firms attempt to front-run tariffs. But business surveys have softened, and falling consumer confidence bodes ill for domestic …
29th May 2025
Although continued trade tensions have heightened economic uncertainty, they have had only a modest impact on consumer and business sentiment in the Antipodes. Indeed, we think the Australian economy will grow at around its trend rate over the coming …
The early evidence suggests that EM exports have held up well, despite higher US tariffs. That’s partly because exporters have front-loaded shipments to the US or have avoided high tariffs via third countries. So long as this remains the case, we expect …
28th May 2025
Africa Chart Pack (May. 2025) …
We doubt that the region’s strong start to the year will be sustained given the backdrop of lower commodity prices, tight policy and, in Mexico’s case in particular, uncertainty around US trade policy. Despite the recent dovish shift by many of the …
27th May 2025
Our View: The economies of Central and Eastern Europe have lost momentum over the course of 2025 and, while the region is relatively insulated from US tariffs, the risks to our growth forecasts have generally shifted lower this month. Some central banks …
22nd May 2025
India’s economy is emerging from its soft patch. Headline CPI inflation should remain close to the RBI’s 4% target over the coming months, enabling the central bank to continue easing monetary policy. We’re expecting a further 50bp of cuts to the repo …
The near-term outlook for Canada is a little bleak. After a solid first quarter, we expect GDP growth to be muted as the imposition of US tariffs and risk of more to come weighs on exports, consumer spending and investment. Employment is likely to decline …
21st May 2025
We assume that the 90-day pause on reciprocal tariffs will become permanent, keeping tariffs at 10% for most countries except China, which will face a steeper 40% levy. A recession should be avoided, provided Congress can quickly redirect the tariff …
20th May 2025
The decision by OPEC+ to follow up May’s faster rise in oil production with a similar increase in June suggests a change in tack on oil policy towards recapturing market share. This will provide a boost to GDP growth in 2025 and 2026 via higher output in …
15th May 2025
Japan’s economy won’t be affected much by global trade tensions. While the Bank of Japan has signaled a pause in its tightening cycle, we think the Board is underestimating the strength of inflationary pressures. We still expect another rate hike in July …
14th May 2025
Euro-zone GDP expanded at a decent pace in Q1 but that was partly due to temporary tariff front-running effects. And while higher defence and infrastructure spending will support euro-zone GDP growth late this year and in 2026, the boost will be smaller …
9th May 2025
Although our base case remains that the hit to UK GDP growth from US tariffs will be relatively small, the downside risks to our below consensus forecast for GDP growth of 0.8% in 2025 have increased. And the growing likelihood that the influence of US …
7th May 2025
China Chart Pack (Apr. 25) …
29th April 2025
India’s economy is emerging from its recent soft patch. Headline CPI inflation should remain close to the RBI’s 4% target over the coming months, enabling the central bank to continue easing monetary policy. We’re expecting a further 50bp of cuts to the …
US import tariffs have largely focused on China. For some EMs (such as India and South East Asia), this creates near-term opportunities to take US market share from China. But there will be offsetting effects if confidence has been hit. And EM commodity …
28th April 2025
Our View: The economies of Central and Eastern Europe are generally less exposed to higher US tariffs than other EM regions, but we have still become more concerned about the hit to growth this year from US trade protectionism. Alongside signs that wage …
24th April 2025
The latest data suggest that the world economy got off to a weak start in 2025 even before most tariffs were implemented. While tariff front-running provided a boost to global industrial activity and exports to the US in Q1, this should soon fade. …
At first glance, Australia and New Zealand should be fairly insulated from the brunt of the US’s ongoing trade war. Both countries have small manufacturing sectors, export little to the US and haven’t been hit with high US tariffs. That said, second-round …
We are assuming that the 90-day pause on reciprocal tariffs becomes permanent, keeping tariffs at 10% for most countries except China which will face a steeper 60% levy. If Congress quickly redirects the tariff revenue back into the economy, a recession …
23rd April 2025
