Filtered by Topic: Monetary Policy Use setting Monetary Policy
China’s economy has regained some momentum in recent quarters and should continue to do relatively well in the near-term. Consumers remain cautious, and a slew of policy measures aimed at supporting the ailing property sector has done little to boost new …
28th June 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
After a strong start of the year, regional growth appears to have slowed in Q2 and we expect this to continue in the coming quarters. Brazil and Mexico’s economies are likely to underperform the Andes and disappoint consensus expectations in the next …
25th June 2024
Prime Minister Modi begins his third term with a weakened mandate, but an economy that is primed to grow by 6.5-7% per year between 2024 and 2026. That would put India on course to become the world’s third largest economy within the next couple of years. …
Growth in the Gulf economies is likely to pick up in the coming quarters, particularly as oil output starts to rise from October. We think non-oil sectors will continue to grow strongly. But the outlook will become more challenging from 2025 as oil prices …
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
After a strong start to the year, aggregate EM GDP growth will slow over the coming quarters. Within this there will be regional variation, with Emerging Asia the outperformer and Latin America the laggard. While we expect the EM monetary easing cycle to …
20th 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
The latest data has been a bit stronger than we had anticipated and suggests that the recovery in euro-zone activity may continue at a moderate pace. The labour market remains tight, with unemployment falling to a fresh record low and wage growth picking …
10th June 2024
China’s economy is expanding at a decent pace, with the manufacturing sector a key source of strength. The country has been increasing its global export market share, and it is unlikely that Biden’s new tariffs will do much to erode recent gains. A …
30th May 2024
Headline inflation across most of Emerging Asia is now either below or only slightly above central bank targets. Nevertheless, policymakers have struck a slightly more hawkish tone recently due to concerns about currency weakness. But we think that weaker …
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
We think the Fed and most other DM central banks will be able to ease monetary policy this year and next more than investors currently anticipate. As a result, we forecast that Treasury yields will end 2024 below their current levels, putting downward …
Africa Chart Pack (May. 2024) …
28th May 2024
While GDP growth in the Andean economies will be stronger this year than last, the opposite is likely to be the case in Brazil and Mexico. Core services inflation, which central banks are paying close attention to, is showing signs of easing. But with …
22nd May 2024
Economic growth strengthened across Emerging Europe in Q1, and leading indicators suggest that it has picked up further in most countries in Q2. With inflation likely to rise (or stay) above central banks’ targets in the second half of this year, the …
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
India has been the star performer among major EMs over the past several quarters and the latest data suggest that the strength of economic activity has continued through to the general election. Headline inflation is grinding back to the RBI’s 4% target …
20th May 2024
Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks large variation in prospects at the country level, with many EMs experiencing a reversal of last year’s fortunes. While we expect the EM monetary …
Global Economics Chart Pack (May 2024) …
15th May 2024
Canada Chart Pack (May 2024) …
9th May 2024
The latest data are consistent with our view that the euro-zone will grow only slowly in the coming quarters. With the labour market softening and inflation continuing to fall, the ECB has signalled that it is likely to start cutting rates in June. We …
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
China Chart Pack (Apr. 24) …
30th April 2024
Africa Chart Pack (Apr. 2024) …
25th April 2024
The paring back of expectations for interest rate cuts in advanced economies this month has generally come alongside an upward revision to interest rate expectations across Emerging Europe. However, we think analysts may still be overestimating how far …
India has been the star performer among major EMs over the past several quarters and the latest data suggest that the strength of economic activity has continued through to the eve of the election. Headline inflation is grinding back to the RBI’s 4% …
24th April 2024
Activity in the region picked up in Q1 and we expect this to continue in the coming quarters. But growth over the year as a whole will fall short of consensus expectations. The disinflation process is entering a slower phase and the delay in rate cuts …
The escalation of the conflict between Israel and Iran has largely been shrugged off by the oil market and risk premia in the Gulf remain low. Even so, growth will remain weak in the Gulf this year. There will be bigger macro consequences from …
The latest activity data suggest that GDP contracted at the start of the year, but a rebound is very likely over the coming quarters. Goods inflation should keep slowing rapidly, but strong wage growth will keep inflation above the BoJ’s target for most …
The recent upturn in activity and employment growth and the resilience of core inflation suggest that the Fed won't start cutting interest rates until later this year. But although it is taking a little longer than expected, we still believe that core …
18th April 2024
Aggregate EM GDP growth will enter a slower phase over the coming quarters. But the headline figure masks large variation in prospects at a country level, with many EMs experiencing a reversal of last year’s fortunes. While we expect the EM monetary …
Global Economics Chart Pack (April 2024) …
12th April 2024
The bigger-than-expected fall in CPI inflation in February was the second in as many months, and together with the Bank of England’s clearer hints that it is getting close to cutting interest rates, it gives us a bit more confidence in our forecast that …
9th April 2024
The latest data are consistent with our view that the euro-zone will remain close to recession in the near term. With the labour market softening and inflation continuing to fall, the ECB is very likely to start cutting rates in June. Elsewhere, the SNB …
8th April 2024
China’s economy continued to recover in the first months of the new year. And we think fiscal support will keep supporting growth in the near-term. That said, the property sector remains a drag on the economy, and we expect a sharp downward adjustment in …
3rd April 2024
The recent easing in price pressures and the Bank of England's new-found dovish slant has convinced investors that interest rates will be cut a bit further over the next two years. But we still think investors are underestimating how far rates will fall. …
The economy made a strong start to the year, but that was largely due to temporary factors that will soon fade. With spare capacity emerging, particularly in the labour market, downward progress on inflation is becoming clearer. Changes to immigration …
2nd April 2024
Africa Chart Pack (Mar. 2024) …
28th March 2024
The past month has seen Egypt’s economic crisis turn around with the devaluation of the pound, aggressive interest rate hike, and unlocking of a new IMF deal. There have been false dawns before, but this shift back toward economic orthodoxy feels more …
27th March 2024
India retained its title as the world’s fastest-growing major economy last year and the latest data suggest that the economy continues to perform exceptionally well. Headline inflation has eased in recent months and we think it will reach the 4% midpoint …
26th March 2024
Faltering consumer spending reinforces our view that GDP growth will slow this year, although that slowdown is likely to be modest. After a disappointing couple of months for inflation, easing demand growth should help to drive a more marked decline later …
25th March 2024
GDP growth will come in below consensus in most EMs this year, with the notable exceptions of India and Taiwan. Although stubborn wage growth means the pace of disinflation is likely to slow from here, we think the EM monetary easing cycle will broaden …
22nd March 2024
Our latest Latin America Chart Pack is embedded below. Activity in the region slowed to a crawl at the end of last year and, while a recovery will take hold in the coming quarters, growth will disappoint consensus expectations. The disinflation process …
13th March 2024
Global Economics Chart Pack (March 2024) …
The timeliest data support our long-held view that the euro-zone economy will remain close to recession in the first half of the year. Beyond that, we think growth will be much lower than the consensus or the ECB are forecasting. However, the labour …
12th March 2024
Canada Chart Pack (Feb. 2024) …
29th February 2024
Aggregate EM growth softened towards the end of last year and we think it will remain weak in 2024. But there will be divergence at the country level with growth slowing in those economies that outperformed in 2023 and growth picking up in last year’s …
