Prospects for Greece’s economy are brighter than for the core euro-zone economies over the next year or two, but a shortage of labour will keep growth lower than in fellow “peripheral” economies, notably Spain. It could also cause growth in Greece to slow …
12th February 2025
A slowdown in the economy, alongside an unfavourable external environment, have contributed to declines in the Indian stock market and the rupee. We continue to expect the stock market to fall further and we now expect a further decline for the Indian …
Due to the relatively small size of the federal workforce and the large number of exempt positions, the federal government hiring freeze should have only a modest impact on payroll employment. More pain would be felt if the President follows through on …
11th February 2025
The latest opinion polls suggest that a CDU-SPD coalition is the most likely outcome of the German election. Such a coalition would be less likely to pursue labour market reforms and activist industrial policies than a CDU-Green coalition. But we think it …
This analysis has been edited to reflect the influence of the Q4 2024 GDP data released two days after the initial analysis was published. Higher taxes for businesses, a lingering drag from the previous interest rate hikes and softer overseas demand …
The end of the de minimis tariff exemption for US imports of low-value goods from China will be a major blow to Chinese e-commerce giants like Temu and Shein. They’re likely to lose market share to foreign competitors like Amazon. But unless tariffs …
After a strong Q4, a shaky start to 2025 has highlighted the fragility of the recovery in euro-zone commercial real estate investment. We still expect transaction volumes to rise over the remainder of the year, but tight lending conditions, refinancing …
We expect equities in Germany to underperform those in other major developed markets in the coming year or so because German firms are more exposed to the increase in protectionism which appears to be gathering pace. This will probably be more important …
While it is possible that a fall in mortgage rates will trigger a modest increase in the number of rental properties over the next two years, we doubt this will offset the weakness in rental supply over the past decade. Our forecast is for tight supply to …
Saudi Arabia’s economic growth will accelerate this year as the Kingdom starts to unwind oil production cuts from April. But while the Kingdom’s non-oil sector started the year on a strong footing, tight fiscal and monetary policy will weigh on growth …
The newly-announced 25% tariffs on all steel and aluminum imports entering the US will have a limited impact on the Canadian economy given that exports of these products account for just 1% of GDP. With President Trump also beginning to change his tune on …
10th February 2025
The Trump administration’s 25% tariffs on steel and aluminum come at a time when domestic capacity utilisation and import intensity are low, implying they will have less of an impact on overall prices than was the case during Trump’s first term. The …
While 2024 was the first year in which inventory removals outpaced completions, we expect strong conversions activity to make it the first of many. Indeed, thanks to further declines in office occupancy and capital values over 2025-2030, we expect US …
The direct impact on the global economy of President Trump’s latest proposed tariffs would be small since steel and aluminium account for a very small share of world trade. Canada’s economy is relatively exposed and it is likely that US steel prices would …
The Central London office pipeline looks set to go from feast to famine over the next few years, with a sharp drop in planned completions from 2027. But we doubt new office supply will run dry. Constraints on development are easing and demand for new, …
Rise in inflation likely temporary Headline CPI inflation rose to a five-month high last month, driven by the lagged effect of stronger demand last quarter on the back of government efforts to boost consumption. But with the boost from stimulus likely to …
Comparing the ECB’s deposit rate to estimates of its equilibrium level suggests that monetary policy will soon be only slightly restrictive. But there is a huge amount of uncertainty around these estimates. With the economy struggling and underlying price …
7th February 2025
The Reserve Bank of India’s (RBI’s) decision to cut the repo rate by 25bps today to 6.25% confirms that, under new leadership, its priorities have tilted from containing inflation to providing more support for the economy. We think a further 75bps of cuts …
The UK stock market appears to be riding high – the FTSE 100 has hit a record high. But local-currency returns from UK equities have been flattered by a weaker pound. In common-currency terms, UK stocks have performed much less impressively, and we expect …
6th February 2025
Even if mortgage rates drop back slightly and house price growth cools over the next few years as we expect, renting will remain the more cost-effective option, supporting apartment demand. Southeast and West Coast apartment markets stand to gain the …
Ecuador’s presidential election on Sunday is set to be a tight race, with a second round run-off in April likely to be needed to separate the two leading candidates. Among the next government’s multiple challenges are improving the security situation and …
A slowdown in the adoption of EVs – along with an increasing preference for hybrids – is likely to increase demand for platinum by a bit more than for palladium over the coming years. Accordingly, with the supply backdrop likely to remain constrained for …
A stabilisation in capital values and decline in interest rates have sparked optimism that we may be past the worst of the real estate debt refinancing challenge. That indeed looks to be the case in the UK. However, euro-zone banks are still pulling back …
Despite Donald Trump cutting deals with Mexico and Canada, we are not backtracking from our revised view that the Fed will stay on the sidelines for the next six months. (See here .) What’s more, if US tariffs end up close to our assumptions, we think the …
While cutting interest rates from 4.75% to 4.50% today, which was the third 25 basis point (bps) cut in seven months, the Bank of England showed some signs that it may cut rates faster and further than our forecast of a decline to 3.50% by early 2026. …
Mozambique’s post-election woes are mounting after another reported delay to one of its key natural gas projects. And this has led to increasing talk that the government may seek to restructure its debt pile. If sovereign default was to occur, the lesson …
This is the first in a series of pieces that revisit our pandemic-era forecasts about the future of global real estate markets and cities and explore how they will evolve in the coming years. This dedicated page highlights key analysis from our earlier …
5th February 2025
President Donald Trump’s eleventh-hour decision to delay the 25% tariffs he had threatened to impose on Canada and Mexico is a good reminder of his unpredictable nature. We don’t think Trump’s U-turn necessarily means he’s bluffing about other tariffs – …
Notwithstanding negative FX returns and a challenging external backdrop brought about by Donald Trump’s agenda, we think Turkish bonds and equities will continue to perform relatively well in 2025, as the continuation of orthodox policymaking in Turkey …
The renewable rollout in Saudi Arabia is set to accelerate on the back of cheap solar panel imports from China. Given that Saudi Arabia is one of a few countries that directly burns crude oil for electricity, this could add further downward pressure on …
The largest increase in rice prices on record has provided a sizeable boost to inflation in recent months but we expect rice inflation to slow sharply this year. While our forecast is a 0.6%-pt decline in the contribution of rice to headline inflation by …
Despite showing a modest fall in job openings, the totality of the December JOLTS data are consistent with a labour market that has stabilised at a healthy level. Despite falling to 7.60m, from an upwardly revised 8.16m in November, job openings have …
4th February 2025
Although President Trump has hit pause on tariffs on Canada, his communications suggest he still wants a broader agreement on various trade issues. Given the chaotic political situation in Canada, it seems unlikely that such an agreement can be made in …
We held an online Drop-In session last week to discuss the outlook for interest rates in major advanced economies as the Fed hit the pause button while the ECB cut again. (See a recording here .) The key message was that the threat of US tariffs and the …
Tracking the knock-on effects of US tariffs on oil …
The threat by President Trump to cut funding to South Africa due to the controversial land expropriation bill will (if implemented) have limited direct economic effects. The bigger concern is that the threat will create tensions within the ruling …
3rd February 2025
The latest PMIs suggests that the weakness in EM manufacturing at the end of last year has continued into 2025. While the events of today have highlighted the uncertainty around Trump’s trade policy, tariffs will prove another headwind to EM manufacturing …
This weekend’s US trade policy announcements and Trump’s threats to impose tariffs on Europe raise the question of whether there is a bigger risk to the euro-zone than we had thought. This Update recaps on four key points about how the euro-zone economy …
The additional 10% tariff that Donald Trump has applied on Chinese goods will have a relatively modest impact on China’s economy, especially if the PBOC allows the renminbi to adjust. But this is likely just the first round in a protracted trade war with …
The January PMIs for Asia were generally weak, supporting our view that manufacturing activity and GDP growth in the region are likely to remain below trend in the near term. And with inflation back to target in most Asian economies, we think central …
Australia’s housing slowdown continued into the new year, as demand softened further. Although the prospect of imminent rate cuts could temporarily buoy buyer sentiment, we don’t expect a meaningful rally in the housing market given that affordability is …
Trump hits Canada, China & Mexico with tariffs President Donald Trump’s decision to impose 25% tariffs on Canada and Mexico and an additional 10% tariff on China from this coming Tuesday, (with the only partial exemption for Canadian energy imports that …
2nd February 2025
Tax breaks included in India’s FY25/26 Union Budget announcement should provide some support to household consumption but, overall, the measures fall some way short of constituting major stimulus. There is always a chance of slippage, but the Finance …
1st February 2025
Recovery in mortgage lending will pause in Q2 Demand for mortgage credit jumped in Q1 in response to the drop in mortgage rates over the second half of 2023. But a rise in financial market interest rates this week, due to higher-than-expected inflation in …
DeepSeek’s success in developing AI models that rival those of US tech-giants has rattled US markets. While this does suggest that catching up to the technological frontier in AI may be easier than many expected, it is not a sign that China is overtaking …
30th January 2025
The Trump administration’s pausing of US aid is a big headwind for many conflict-ridden economies (including Syria and Ukraine) as well as parts of Sub-Saharan Africa, but is unlikely to move the macro needle for most EMs. The potentially bigger …
Concerns about the impact of the Budget, coupled with higher interest rates, led to a moderation in commercial property demand according to the Q4 RICS commercial survey. Capital value expectations also declined and a dip in investment enquiries points to …
The Q4 RICS commercial property survey saw investment sentiment turn positive for the first time since 2022 and a shift in perceptions of cycle phase, with the majority now believing we have reached the bottom or already in an early upturn. At the sector …
January’s EC survey points to continued weak GDP growth at best. While it also suggests that there are some upside risks to inflation in the near term, firms’ employment expectations and labour shortages are easing which should help to bring down services …
It’s clear that after cutting its deposit rate from 3% to 2.75% today, the ECB expects to reduce rates further in the coming months. We think that weak growth and inflation will mean that the Bank has to lower interest rates further than most investors …
