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New home sales fall in April due to high mortgage rates The spike in mortgage rates to 7.3% in April caused a sizeable drop in new home sales, as buyers decided to wait for a chance of getting a lower rate. We think this will partly reverse in May as …
23rd May 2024
The strength of healthcare employment and spending growth is because the sector is still recovering from the pandemic and also thanks to the jump in Affordable Care Act (ACA) enrolments. Employment and spending have almost caught up with their …
Survey provides support for summer rate cut Today’s May flash PMI survey will have provided the Bank of England with some comfort after yesterday’s stronger-than-expected inflation data for April. Crucially, the further fall in the services output prices …
UK election 2024 …
FOMC stresses higher for longer The minutes of the Fed’s early May policy meeting are, not surprisingly given the backdrop of data releases ahead of that meeting, somewhat hawkish. The resilience of economic growth and employment, and particularly the …
22nd May 2024
We’ll be discussing what the election means for the economy and financial markets in a 20-minute online briefing at 9.30am BST on Thursday 23rd May. (Register here .) The general election on Thursday 4 th July, which the Prime Minister announced today, …
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 …
Existing home sales slide in April, with further falls likely ahead The drop in existing home sales in April will be followed up by further falls in the coming months, supporting our view that the recovery in transactions we expect this year will be …
This page has been updated with additional analysis since first publication . Limited scope for tax cuts April’s public finances figures got the new 2024/25 fiscal year off to a shaky start and cast further doubt on the Chancellor’s ability to unveil big …
We’ll be discussing the outlook for UK inflation and interest rates in a 20-minute online briefing at 9.30am BST today. (Register here .) This page has been updated with additional analysis since first publication. Stickiness of services inflation makes …
Although it left rates unchanged at its meeting today, the RBNZ indicated that interest rates may have to stay higher for longer. However, we think the Bank is overstating the upside risks to the inflation outlook. Accordingly, we still think there’s a …
RBNZ signals rate cuts may have to wait Although the RBNZ suggested that there was a high bar for further policy tightening, the Committee stated that interest rates may have to remain at their current restrictive level well into 2025. In our view, the …
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 …
Despite the hawkish rhetoric from central bankers over the last few days, we still expect long-dated government bond yields in most developed markets (DM) to fall over the next year or so. 10-year government bond yields across DMs have generally been …
21st May 2024
The latest apartment rent data are consistent with our view that rental growth will be sluggish this year. Although single-family rent growth has fared better, we suspect it will soon start to slow again. Zillow reports that apartment rents continued to …
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 …
Easing in core inflation is being sustained The fourth consecutive 0.1% m/m average increase in the Bank of Canada’s preferred core price measures in April will give the Bank confidence that the further easing in core inflation is being sustained. That …
RBA is done tightening policy The RBA continued to tout the line that all options are on the table as far as its next move is concerned. However, we still expect the Bank’s next move to be down, not up. The minutes of the RBA’s May meeting confirmed that …
Having soared to a record high level under the Biden administration, we expect US shale oil output to peak this year before contracting in 2025, driven by a combination of further industry consolidation, productivity improvements running out of steam, and …
20th May 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 …
The further evidence of softer activity this week might not be enough to persuade the Bank of Canada to cut interest rates in June, but they add to our sense that rate cuts are coming very soon. Momentum fading going into Q2 The recent data suggest that …
17th May 2024
The recent sharp drop in industrial REIT prices appears to have been tied to Prologis’ Q1 earnings call, which referred to especially weak leasing in Q1 and a cut to expected year-end net operating income. We aren’t too alarmed by either – slow Q1 …
New tariffs much ado about nothing The Biden administration’s announcement this week of an increase in tariffs on hi-tech & green-related goods imports from China will have little impact. The biggest change ostensibly was the announcement that the tariff …
We’ll be discussing the outlook for UK inflation and interest rates in a 20-minute online briefing at 9.30am BST on Wednesday 22nd May shortly after the release of April's CPI data. (Register here .) Next Wednesday’s release of April’s CPI inflation data …
BoJ starting to scale back bond purchases The 0.5% q/q fall in Q1 GDP was the second fall over the last three quarters. With GDP unchanged in Q4, Japan barely escaped a recession. What’s more, with real consumption falling for four consecutive quarters, …
Budget leaves much to be desired The headlines this week were dominated entirely by the contentious 2024/25 Federal Budget , which some commentators have described as “smoke and mirrors”. We certainly sympathise with those who take umbrage at Treasurer …
Although the “big-tech” sectors have been out of favour compared to others so far this quarter, we expect them to regain the lead before long and help the US stock market outperform those elsewhere. The S&P 500 reached a new all-time high yesterday, and …
16th May 2024
An interactive guide to r* in the post-pandemic economy, including our forecasts for the major advanced economies out to 2030. This dashboard was last updated on 17th October 2023. If you have subscriber access to the data underlying this dashboard, you …
Financial conditions have loosened somewhat in advanced economies this year, suggesting that the peak drag from monetary tightening is behind us. However, outside Japan, they remain tight by past standards and are likely to contribute to below-trend …
We discussed the outlook for UK inflation and interest rates in an online briefing just after the release of April's CPI data. Watch that briefing here . Our forecast that CPI inflation will fall from 3.2% in March to below 2.0% in April and below 1.0% …
Soft IP adds to downside surprises on activity The 0.3% m/m decline in manufacturing output in April , together with the downward revision to the March gain, from 0.5% to 0.2%, continues the run of weaker activity data and will further solidify …
This interactive dashboard presents long-run total return forecasts for 22 headline indices covered on our Asset Allocation service. These are expressed in local-currency, USD, EUR, and GBP terms. If you have subscriber access to the data underlying this …
Weaker than expected recovery in housing starts The modest rebound in housing starts in April confirmed that the slump the month before was a weather-related blip. But the recovery wasn’t as strong as we had anticipated, which potentially casts some doubt …
Labour market will continue to loosen The continued rise in the unemployment rate in April further diminishes the likelihood that the Reserve Bank of Australia will deliver another interest rate hike. The 38,500 rise in employment last month was stronger …
This page has been updated with additional analysis since first publication. Activity set to rebound this quarter The renewed drop in GDP in the first quarter mostly reflects production shutdowns at major carmakers and a pronounced rebound this quarter …
Housing market struggling to bloom The April housing market data show that the spring season is shaping up to be vastly different than last year, with sales dropping back despite higher listings and house prices unchanged. This has caused us to trim our …
15th May 2024
This interactive dashboard allows you to explore all of our forecasts and key data for the UK economy. If you have subscriber access to the data underlying this redesigned dashboard, you can download it via the menu options in the top right of each chart …
Global Economics Chart Pack (May 2024) …
An interactive guide to the impact of market interest rate expectations on the fiscal policy space available to the Chancellor. This content was last updated on 1st May 2025. If you have subscriber access to the headroom forecasts, you can download it …
Manufacturing sector faltering The weakness of manufacturing sales in March suggests that the economy lost momentum heading into the second quarter, matching the message from the earlier preliminary estimates for retail sales and GDP. The 2.1% m/m fall in …
CPI consistent with September rate cut The slightly more modest 0.3% m/m increase in core CPI in April was even better than it looked, particularly given that we already know the PPI components that feed into the Fed’s preferred PCE deflator measure came …
Consumers not looking quite as strong We would caution against jumping to the conclusion that consumers are starting to crack under high interest rates, despite the disappointing retail sales data for April, as some payback always seemed likely after the …
April’s inflation data confirm Riksbank unlikely to cut in June. The small increase in the Riksbank’s target CPIF measure of inflation, which excludes the effect of changes in interest rates, from 2.2% in March to 2.3% in April, was broadly as expected …
Treasurer Jim Chalmers has sought to present the 2024/25 Budget as one that strikes a balance between providing support to an ailing economy and keeping pressure off inflation. In our view, that’s disingenuous: the combination of increased government …
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
Even if interest in ‘meme’ stocks rebounds following a renewed surge in GameStop’s share price, some of the telltale signs that a bubble in the broader stock market may be entering its final stages – such as excessive leverage – are absent. This suggests …
We think the Bank of England will decide to start cutting rates at its next meeting, but there’s a series of crucial data releases between now and that policy decision on 20th June – not least the April CPI report due Wednesday, 22nd May . Our UK team …
We think the ECB’s June meeting will mark the start of a more aggressive rate cutting cycle than markets are currently pricing. How far and how fast will the Governing Council go to ease policy? And what will lower rates mean for the euro-zone economy and …
PPI brings mixed news for PCE supercore The bigger-than-expected 0.5% m/m increases in both all items and core final demand producer prices in April were mainly due to downward revisions to earlier months, with the 0.2% m/m gains in March both revised to …
