Falling inflation leaves a January rate cut finely balanced The drop in Brazilian inflation to 4.5% y/y in November won’t prompt an interest rate cut at the central bank’s meeting later today (we expect the Selic rate to stay at 15.00%). But it does …
10th December 2025
10-year Treasury yields have risen in recent weeks despite investors moving to price in a rate cut today. One reason for that seems to have been an increase in the term premium, and we expect this component to remain volatile over the coming year. It …
The Saudi economy has been boosted by the unwinding of oil output cuts this year and this will continue over the coming quarters, but a step up in fiscal consolidation efforts means that overall GDP growth is likely to come in weaker than most anticipate …
Surprise softer reading adds to CBE headaches Egypt’s headline inflation rate eased a touch from 12.5% y/y in October to 12.3% y/y in November despite further rent rises and fuel subsidy cuts. Even so, given the Central Bank of Egypt’s own admission to …
On our current forecasts, India is on course to overtake Japan as the world’s fourth-largest economy in 2027. But there is a decent chance that the upcoming rebasing of India’s national accounts data (due in February) will show that this has happened …
Food prices push up inflation, but domestic demand remains weak Consumer price inflation rose to its highest level since China’s reopening from zero-COVID (excluding volatility around Lunar New Year), but this was the result of a weather-related rise …
Overview – The RBA is poised to join the rather exclusive club of advanced economy central banks that tightens policy in 2026. With growth accelerating when there’s little to no spare capacity and the labour market tighter than is consistent with full …
The JOLTS data for September and October show glimpses of a rosier labour market, with firms in tariff-affected sectors posting more jobs and layoffs concentrated in a couple of sectors. This chimes with November’s NFIB survey, also released today, which …
9th December 2025
Long-dated government bonds in many developed markets (DMs) have sold off aggressively over the past month or so as investors have pared back rate cut expectations or, increasingly, pencilled in rate hikes. While we think these moves are overdone in many …
The Q4 PREA consensus downgraded the all-property forecast for 2026-29. Even so, the consensus is still notably more optimistic than us. Indeed, stretched valuations mean we expect a modest rise in NOI yields and more muted capital growth over this …
We have augmented our UK Commercial Property coverage with the addition of office forecasts for seven major regional cities. Overall performance is informed by our views on the RoUK market, but differences in the outlook for regional labour markets, …
The rise in the number of business bankruptcies this year, despite little change in default rates for bank loans or speculative-grade debt, seems to reflect the larger number of firms trying to re-finance debt issued when interest rates were much lower. …
CBK delivers another 25bp cut The Central Bank of Kenya lowered its policy rate by another 25bp, to 9.00%, today and the accompanying statement suggested that the economy needs more stimulus, reinforcing our view that more cuts are coming. Today’s …
The November NFIB survey suggests that the labour market is regaining momentum, while also pointing to some upside risks to inflation. At the margin at least, that lends some support to our view that the Fed’s likely interest rate cut tomorrow will be …
The economic fallout from renewed border clashes between Thailand and Cambodia should remain modest. Trade between the two countries is small, and Thailand’s tourism sector should be insulated given that the fighting is far from the country’s main …
December cut still on the cards but easing to become more gradual next year The rise in Mexican inflation to 3.8% y/y in November is unlikely to stop Banxico from cutting its policy rate by another 25bp next week. But it supports our view that the easing …
The Middle East and North Africa is set to record its fastest pace of GDP growth (outside of the pandemic period) since 2011. Continued oil output hikes and the switch on of Qatar’s North Field will boost the Gulf economies. But lower energy prices are …
Overview – After a very strong 2025, economic growth in India is likely to slow in 2026 and 2027 in the face of punitive US tariffs. But they could get rolled back and, even if they don’t, India will remain a relative bright spot in the global economy. …
The RBA sounded concerned about upside risks to inflation when it left its policy rate unchanged today and we now believe that its next move will be rate hike as soon as February . The Bank’s decision to leave the cash rate unchanged at 3.6% was unanimous …
China’s leadership has spurned Nvidia’s knee-capped H20 chips. But it may be willing to let its firms buy the more powerful H200 chips that President Trump is now offering. This would allow China to speed up its buildout of AI infrastructure and increase …
RBA will tighten policy as soon as February The RBA sounded concerned about upside risks to inflation when it left its policy rate unchanged today and we now believe that its next move will be rate hike. The Bank’s decision to leave the cash rate …
Poland’s monetary easing cycle has dragged down short-term government bond yields, but unlike in past cycles, long-term yields haven’t come down very far. Even with the policy rate now likely to fall to 3.50% next year, given the backdrop of underlying …
8th December 2025
The readout from today’s Politburo meeting strikes a relatively dovish tone, suggesting that more fiscal support and monetary easing is on the cards next year. The leadership continues to highlight the importance of domestic demand in driving the economy, …
Last week I outlined the key macro themes that are likely to shape the global economy in 2026 . This week I tackle a question that has come up frequently in subsequent client meetings: What are the key risks to our view? Ask an economist about “risks” and …
Level of output weak despite October rebound The rise in German industrial production in October was stronger than expected but it still left output close to a post-pandemic low. And though defence spending appears to be supporting production, this is …
As the final round of G10 central bank policy meetings for the year kicks off, the emerging theme is divergence. That applies to both the immediate policy decisions and, more importantly, to the outlook for 2026. We think the Fed and the BoJ will lean …
Exports to remain resilient next year The tariff cuts agreed under the US-China trade truce didn’t help to lift shipments to the US last month, but overall export growth rebounded nonetheless. We think China’s exports will remain resilient, with the …
Wage growth set to remain strong The Bank of Japan’s preferred measure of wage growth was little changed in October but that won’t prevent the Bank from resuming its tightening cycle next week. According to the preliminary estimate, labour cash earnings …
7th December 2025
Plunge in unemployment rate changes the narrative The risk that the Bank shifts course and begins hiking is one we had not focused on as closely until today’s November Labour Force Survey , which showed another big rise in employment and, more …
5th December 2025
The World in 2026 …
K-shaped manufacturing? Data this week showed manufacturing output was unchanged in September , capping off a weak third-quarter performance. Meanwhile, the November ISM manufacturing index fell by a cumulative 0.9 points over the past two months, …
As the new year approaches, we are highlighting the key themes that we think will set the overarching narrative for global commercial real estate in 2026. We’ve spent the last few weeks talking with clients at a series of in-person events, online …
NBP set for more rate cuts The National Bank of Poland (NBP) cut its policy rate by 25bp this week to 4.00% and we now expect two more 25bp cuts next year. (You can find our initial response to the decision here .) In his post-meeting press conference on …
Household spending driving Brazil’s slowdown The key release out of Brazil this week was Q3 GDP data , which showed that the economy essentially stagnated (GDP was up 0.1% q/q). Household consumption is now very weak, slowing from 5.8% y/y in Q3 last year …
Consumption growth set to slow this quarter The delayed September PCE data showed that monthly core price growth was only marginally above the target-consistent rate, with the annual core inflation rate edging back down to 2.8%. Real consumption was …
Post-shutdown sentiment boost Consumer sentiment ends this year a little stronger thanks to the government reopening and the stock-market rally continuing. This should help keep fourth-quarter consumer spending resilient despite lingering concerns about …
The Financial Times has named 'The Fractured Age' by Group Chief Economist Neil Shearing as one of the top economics books of 2025. Drawing on years of analysis by the Capital Economics team, the book reveals how the deteriorating US-China relationship is …
3rd December 2025
A red future for prices of the red metal? The rally in copper prices this week to an all-time high of around $11,600 per tonne appears to have its roots in rising concerns around the health of supply. Indeed, copper prices have risen by roughly 30% …
Fiscal splurge isn’t on the cards China’s Finance Minister Lan Fo’an’s article on fiscal policy, published in the People’s Daily this week, provided some insights into the leadership’s fiscal priorities ahead of the 15 th Five Year Plan period …
We expect euro-zone GDP growth to remain fairly slow in the coming years. Germany’s fiscal stimulus should provide a temporary and fairly modest boost, and we don’t think it will do much to raise growth elsewhere. Meanwhile, we think inflation will …
The raft of economic data released in South Africa over the past week suggests that the economy will continue to expand at a solid (albeit unspectacular) pace over the course of 2026-27. GDP figures published on Tuesday showed that South Africa’s economy …
The year began amid optimism that Europe was finally prepared to meet its economic potential. But as the end of 2025 approaches, how much has actually changed in the European story of weak growth and political fragmentation? In this special episode of The …
Yet another consensus-beating gain November’s much better-than-expected 53,600 rise in employment marks the third consecutive large consensus-beating gain, confirming that hiring has regained momentum after the initial tariff shock. The even more striking …
