NBP cuts by 25bp, easing cycle likely to proceed cautiously The National Bank of Poland (NBP) cut its policy rate by 25bp again today, to 4.75%, but we think that monetary easing over the coming year will be smaller than most anticipate. Out of the 30 …
3rd September 2025
Dip in rates supports modest rise in mortgage activity Lower borrowing costs sparked a small rebound in home purchase mortgage applications in August, lending support to our view that existing home sales will see a modest lift in the second half of what …
Electricity prices in the US have been hitting the headlines, with some laying the blame at the feet of the AI rollout and data centre construction. This Update answers key questions on what is driving the sharp rise in electricity prices in the US and …
Despite the strong rebound in Q2, Sweden’s economy has fared worse so far this year than many expected. We now forecast it to grow only moderately over the remainder of the year, before returning to its trend rate over the course of next year. While the …
Foreign investors have generally been piling into Japan’s stock market in recent months, presumably encouraged by, among other things, the country’s recent trade deal with the US, the continued weakness of the yen, an improving economy, a brighter future …
PMIs rise, but private non-oil GDP growth still soft The whole economy PMIs for August strengthened a little in the Gulf states, though the surveys still suggest that activity private non-oil sectors has softened in Q3. Elsewhere, while Egypt’s PMI fell …
The government’s post-pandemic infrastructure drive is helping to ease some of the bottlenecks that have previously constrained India’s economy, with particular success in developing port, railway and digital infrastructure. The good news is that …
Easing cycle to continue, albeit at a slower pace The continued decline in Turkish inflation last month, to 33.0% y/y, keeps the door open to large interest rate cuts at the central bank’s meeting next Thursday. That said, with inflation coming in a bit …
Strong rebound in activity could prompt fewer cuts by RBA Activity rebounded strongly in Q2, and for all the right reasons. The pickup in domestic demand raises the risks that the RBA won’t loosen policy as aggressively as we’re predicting. The 0.6% rise …
Overview – GDP growth will slow from its current above-trend rate to a more sustainable pace as external demand softens. However, with consumption growth still healthy and underlying inflation set to remain above the Bank of Japan’s 2% target, we expect …
As long-end government bond yields continue to rise, identifying the culprit for the latest sell-off becomes ever more pressing. The sell-off in core government bond markets over the past couple of days has taken 30-year yields in the UK, Germany and …
2nd September 2025
The rise in the EM manufacturing PMI in August suggests that the sector accelerated in Q3, helped by external demand. But, overall, conditions in manufacturing remain pretty weak and may deteriorate again over the rest of the year. The aggregate emerging …
The latest PMIs suggest that global industry has been fairly resilient in the wake of US tariffs so far and may already be past the worst. Meanwhile, goods price pressures remain much stronger in the US than elsewhere. The output component of the …
Contagion from France’s government bond market to the rest of the euro-zone will probably be muted and short-lived unless France’s own crisis becomes much bigger than we expect. This is partly because the conditions for a systemic crisis in the euro-zone …
In the wake of the Court of Appeals’ decision upholding a lower court finding that Trump exceeded his executive powers by imposing sweeping universal and reciprocal tariffs, this Update answers key questions on what comes next and the potential economic …
Some signs of life despite low headline index The bounce in the ISM manufacturing new orders index in August suggests that, although the manufacturing sector is still struggling, it may now be turning a corner. The modest 0.7-point rise in the headline …
The global geopolitical map could have been redrawn by the end of Donald Trump’s second term. Some form of rapprochement between the US and China is conceivable in the next few years, as is a breakdown in relations between the US and its traditional …
Slowdown in growth supports an improving inflation outlook The slowdown in Brazil’s GDP growth to 0.4% q/q in Q2 was driven in large part by a softening in domestic demand, which is likely to continue over the coming quarters. And with the inflation …
If the Chancellor, Rachel Reeves, is going to continue to meet her fiscal rule with a buffer of £9.9bn, she will probably have to raise £18-28bn in the Autumn Budget, mostly via higher taxes. We suspect households and banks will bear the brunt of higher …
Our latest estimate suggests the Chancellor will need to raise £18-28bn in the Budget to avoid breaking her fiscal rules and to maintain her £9.9bn buffer. (See our Fiscal Headroom Monitor .) With Labour MPs not amenable to spending cuts and financial …
President Trump’s attempt to fire Lisa Cook from the Federal Reserve Board of Governors has revived a broader debate about the value of central bank independence. The strength of the evidence in favour of greater central bank autonomy lowering inflation …
The latest bout of unrest in Indonesia is unlikely to deliver a significant blow to the economy, but it is a symptom of underlying economic weaknesses and highlights political risks that could erode the country’s appeal to foreign investors over time. The …
Stable inflation will keep ECB on hold The small increase in headline inflation to 2.1% in August makes little difference for policymakers at the ECB who look certain to leave interest rates unchanged at next week’s meeting and probably for several months …
Asia-Pacific all-property capital values showed signs of stabilisation, with a milder 2.5% y/y decline in Q2. Still, the upturn in both investment activity and capital values will be weaker than in any previous cycle, predominantly due to risk-free rates …
While the Bank of Japan is worried that trade tensions will weigh on profits, business investment and wage growth, profits have in fact held up well so far and we expect that to remain the case going forward. And with uncertainty about the US tariff …
Global equities and industrial commodities have been dancing to different tunes in recent years. We suspect that will remain the case through next year. The changing relationships between the prices of global equities and industrial commodities can be …
1st September 2025
Worries that interest rate cuts in Korea are stoking financial risks look overdone. Property prices across most of the country are either flat or falling, while household debt is declining as a share of GDP. Having cut rates by a cumulative 100bps between …
Even though the components of inflation that are directly linked to past inflation rates have played a big role in the recent rebound in CPI inflation, we think their influence will fade over the next couple of years. We expect that to be the case even if …
Net lending to property still booming Net lending to property was strong again in July, reaching £1.8bn. While this was a slightly lower outturn than June, it nevertheless drove an acceleration in the three-month total, which hit £6.0bn. July’s gain was …
This page has been updated with additional analysis since first publication. High mortgage rates and the prospect of tax hikes holding back the economy July’s money and lending data show that interest rate cuts are yet to significantly boost economic …
PMIs suggest continued drag from industry The manufacturing PMIs out of Emerging Europe remained at weak levels in August suggesting that industry continues to be a drag on the region’s growth. That said, other survey data suggest that Central European …
Strong domestic demand points to rebalancing challenges The much-stronger-than expected Q2 Turkish GDP growth figure of 1.6% q/q (driven by domestic demand) is likely to make the central bank tread cautiously and suggests that the risks to our hawkish …
House prices still struggling to recover The unexpected fall in the Nationwide measure of house prices in August shows that the recovery in the housing market after the drag from the rise in stamp duty charges on 1 st April is being held back by weak …
Australian house prices rose at their fastest pace in 18 months in August. With leading indicators suggesting further gains are on the cards, we’re inclined to revise up our forecast for house prices over the coming months. That said, the housing rebound …
The August PMI readings for most countries in Asia were subdued and we continue to expect manufacturing in the region to struggle in the near term. And with inflation set to remain contained, we think that central banks in the region will continue to …
This report was first published on Monday 1st September, covering the official PMIs and the RatingDog manufacturing PMI. We added commentary on the RatingDog services and composite PMIs on Wednesday 3rd September. Growth picks up, led by services The …
US Court of Appeals agrees that Trump’s tariffs are unlawful By a 7-4 vote, the Federal Court of Appeals has upheld the earlier ruling by the Court of International Trade (CIT) in May that found President Trump exceeded his authority in imposing …
29th August 2025
A quiet month-end week has seen the dollar stabilise – in spite of the Trump administration’s latest escalation of its attacks on the Fed. The lack of follow-through after those attacks and Fed Chair Powell’s dovish Jackson Hole speech last week suggests …
Bank’s framework review approaching Speaking at Banco de Mexico’s 100 th anniversary event this week, Bank of Canada Governor Tiff Macklem steered clear of discussing the economic or policy outlook. However, he offered some useful hints about the Bank’s …
Poland’s draft budget for 2026 outlined this week suggests that fiscal policy will be a lot looser than we previously expected over the coming year. The proposed budget deficit for next year was announced at 6.5% of GDP (and the government’s projection …
This week the CBO published updated projections showing that tariffs are now expected to raise $3.3 trillion over the next ten years, up from an earlier estimate of $2.5 trillion. The upwardly revised numbers suggest that tariffs will reduce the deficit …
Economy is confounding expectations Data released today confirmed that India’s economy had a very strong first half of the year. GDP growth confounded expectations and accelerated from 7.4% y/y in Q1 to 7.8% last quarter. (See here for our Data Response …
Bad news mounts for Milei Argentina’s President Milei has been faced with a growing wave of bad news in the past few weeks. For one thing, the latest activity data have come in very weak – the monthly EMAE index contracted for a second consecutive month …
The unprecedented levels of trade uncertainty brought about by US tariffs appear to have had only a limited impact on investment so far. Uncertainty has persisted and our model indicates that there may yet be some damage to investment. But we suspect that …
The still tight rental market and softening outlook for housing activity – due to weak employment, high mortgage rates and growing speculation around property tax rises in the Autumn Budget – suggests rents will continue to rise faster than house prices …
South Africa SWIFT Ban would be severe shock News emerged this week that the South African Treasury was evaluating the risk of the US excluding it from the SWIFT messaging system which is widely used in cross-border payments. These discussions appear to …
Data released on Thursday confirmed that Switzerland’s economy grew by just 0.1% q/q in Q2 as the previous tariff front running ended. This meant the economy averaged growth of 0.4% per quarter in the first half of a year, after adjusting for sporting …
