Next year, inflation is likely to remain higher in Spain and Germany than in Italy and France . But unlike in the 2000s, inflation differentials are not currently a sign that unsustainable imbalances are building up. Headline inflation in the euro-zone …
19th November 2025
While the recent pace of transactions and house price growth is unlikely to be sustained over the coming months, we doubt it will slow by as much as some sentiment indicators suggest. But by crimping households’ disposable income, our view that the …
Trade deficit narrows as gold imports drop back Swings in gold trade were once more a key driver of movements in the trade balance in August, resulting in a $18.6bn narrowing in the deficit to $59.6bn. The shutdown-delayed August International Trade …
EM growth held up well in Q3, although headwinds from fiscal tightening, softer labour markets and (for some) lower commodity prices will drag growth down over the coming year. Most of our 2026 GDP growth forecasts lie below the consensus. This is still a …
The latest activity data suggest that South Africa’s GDP growth slowed a touch in Q3, to around 0.5% q/q, and we expect it to remain around this rate over the coming quarters, helped by improved terms of trade as well as low inflation and looser monetary …
Euro-zone inflation has hovered close to or above the 2% target for over a year, but we think it will fall to about 1.5% in January and average just 1.3% in 2026. Data released this morning confirmed that headline inflation edged down from 2.2% in …
This Update examines five key questions about AI-related demand for commodities, and the economic consequences of potential future disruptions to their supply. 1) How will AI affect demand for electricity? We have discussed the implications of the AI …
Taiwan’s economy is booming and this has been driven almost entirely by exports, whereas domestic demand, and especially consumer spending, has been sluggish. That’s because faster wage increases in the electronics sector have benefited only a small share …
Soft core inflation makes new inflation target attainable Although headline inflation in South Africa rose, to 3.6% y/y, last month, the decline in core inflation, to 3.1% y/y, is likely to give policymakers at the Reserve Bank confidence that they can …
BI holds, finance minister invited to Board meetings Bank Indonesia left its benchmark interest rate on hold at 4.75% today for a second consecutive meeting but the accompanying communications remained dovish and we still think there’s scope for further …
Europe Commercial Property Valuation Monitor (Q4 2025) …
This page has been updated with additional analysis since first publication. We’re hosting a 20-minute online briefing at 3.00pm GMT today to assess what the upcoming Budget will mean for the economy, housing and financial markets. (Register here .) It’s …
Concerns that new Prime Minister Sanae Takaichi will drastically reduce immigration inflows seem overdone. But we suspect that the increase in immigration inflows over the past decade will come to a halt at a time when the population is shrinking at an …
Headline inflation in India has fallen to a multi-decade low, but core inflation is currently at its highest in 18 months. But even if the economy continues to perform well as we expect, low household inflation expectations, falling gold prices and cuts …
The recent plunge in US tech stocks seems partly due to concern about their valuations which, by some metrics, had looked their most stretched since the “dotcom bubble”. This Update argues that those valuations aren’t as elevated as they might seem, and …
We expect the Reserve Bank of New Zealand to close out its easing cycle with a 25bp cut at its meeting ending on 26 th November. Our sense is that the Bank will want to take out a final bit of insurance to shore up the fragile economic recovery. Markets …
Wage growth not as sticky as it seems Although wage growth in Australia held steady last quarter, underlying momentum appears to have softened a touch. At the margin, that supports our view that the RBA will resume its easing cycle in H2 2026. The 0.8% …
House prices rise for the first time in a year October’s housing data were broadly positive, with sales and prices both up on the month. We expect falling starts and a lower path for the Bank’s policy rate than markets are pricing in to drive a more …
18th November 2025
Strength in domestic demand will keep BanRep hawkish The stronger-than-expected 1.2% q/q expansion in Colombia’s GDP in Q3 reflects continued strength in domestic demand and adds to reasons to expect the central bank to hold off resuming its easing cycle …
Overview – We expect global inflation to hover around 2.5% in the year ahead but there will be significant differences between economies. Goods inflation has a bit further to rise in the US which, coupled with elevated services inflation, will keep the …
The AI boom that has been driving the stock market for several years is now clearly evident in economic activity too. In particular, we suspect that AI explains most of the pick-up in ICT sector growth in the first half of this year, which added an …
How the rollout of AI is affecting sectors in the S&P 500 The boost AI has given to the US stock market since the launch of ChatGPT has been so strong that the S&P 500 would currently be closer to 5,000 without it. It’s therefore hardly surprising that …
It is still early days in the roll-out of AI but the data available at this stage suggest that there is a big variation in its usage between European economies. Firms in the Nordics and Benelux are generally far more likely to be using AI than those in …
MNB on hold as fiscal risks mount The Hungarian central bank (MNB) left its base rate on hold, at 6.50% as expected today, and with pre-election fiscal loosening on the cards, the monetary easing cycle looks like it may stay paused for longer than we …
Contraction in GDP strengthens the case for December rate cut The surprise 0.1% q/q contraction in Chile’s economy was mainly due to weaker private consumption and exports and supports our view that the central bank will cut its policy rate by 25bp in …
After a fairly quiet 2025, the EM electoral calendar looks busy again in 2026. The run-up to votes could add to fiscal strains in Brazil, Colombia and Hungary. Meanwhile, there is a risk of (potentially violent) protests accompanying elections in …
Recently we held a series of roundtable discussions with clients in our London office about the outlook for commercial real estate in 2026 and beyond. This note shares our answers to some of the most interesting questions raised, covering the potential …
Asia-Pacific all-property capital value declines slowed further with Q3 down just 1.1% y/y. Yet we expect the recovery to be modest, constrained by high risk-free rates and limited rental growth. Australia’s retail and industrial sectors and Korea’s …
RBA in no rush to resume rate cuts The minutes of the RBA’s November meeting reinforce the notion that the Bank will remain in wait and watch mode in the near term. While we still expect it to cut rates by another 50bp late next year, risks are tilted …
Brazil’s monetary policy stance is extremely tight – the policy rate is at its highest level since the mid-2000s. With GDP growth likely to disappoint and inflation softening, there should be ample scope for interest rates to come down when the easing …
17th November 2025
Assuming it is implemented soon, the deal to lower US tariffs on Switzerland from 39% to 15% would leave Swiss exporters paying the lowest US average tariff rate of any major economy, at around 7%. Even if the 14% appreciation of the franc against the …
Emerging economies’ external positions generally look strong. But current account deficits are starting to widen in a handful of countries in Latin America as well as in the Philippines and Poland. That could make them more vulnerable to a bout of risk …
Some encouraging signs despite upside surprise The modest upside surprise to headline inflation in October was largely due to one-off factors, whereas the smaller average monthly gain in CPI-trim and CPI-median lends some support to our view that the Bank …
The questions that come up most often in client meetings tend to offer a good barometer of the issues preoccupying investors. Over the course of this year, the focus has shifted markedly. The first half was dominated by trade tensions and tariff risks; …
Strongest net lending to CRE since August 2023 driven by refinancing Outstanding CRE debt held by commercial banks climbed to $2.46trn in October, with monthly net lending totalling $10bn. That was the strongest monthly rise since August 2023. The …
The surprising softness in Polish inflation this year can be explained partly by lower energy inflation, but also by steep declines in the prices of some durable goods. The latter probably won’t last. And there are strong medium-term inflation pressures …
A growing divergence in views on the trajectory of oil demand over the next 25 years – and whether demand will even reach a peak during this period – partly reflects the reduction in political support for the energy transition. While the balance of risks …
This page has been updated with additional analysis. Big contraction to be a one off The 0.5% q/q fall in GDP in Q3 shows that US trade policies have been much more disruptive for Switzerland than was anticipated. But a deal agreed last Friday will reduce …
The renewed sell-off in US tech stocks last week puts even more of a spotlight on the earnings report of AI-bellwether Nvidia this Wednesday: it will set the tone for the wider tech sector over the coming few weeks into year-end. Meanwhile, the UK …
Thailand’s economy contracted during the third quarter and we think it will struggle over the coming months, prompting the central bank to step in and loosen monetary policy by more than most expect. GDP rose by just 1.2% y/y in Q3, down from 2.8% the …
Activity will rebound this quarter The fall in GDP last quarter further reduces the chances of a BoJ rate hike in December but we still think that the Bank will resume its tightening cycle at its January meeting. The 0.4% q/q fall in Q2 GDP was less …
Russian economy slowing even before latest US sanctions The slowdown in Russian GDP growth in Q3, to 0.6% y/y, confirms that the war and high interest rates are continuing to take their toll on activity, and the latest US sanctions on the energy sector …
14th November 2025
*This Weekly has been updated since its original publication to include revised post-shutdown data-release dates and previews* Normal service resumes in Washington A wave of flight cancellations and concerns that food-aid programs would soon run out of …
The Summary of Deliberations of the Bank of Canada’s October meeting, when it cut its policy rate by 25bp to 2.25%, unsurprisingly had a dovish tilt. After discussing the economic backdrop following the US tariff shock, members agreed that “monetary …
Where is the big macro payoff from the surge in artificial intelligence investment? And is AI wiping out entry-level jobs? The latest episode of The Weekly Briefing from Capital Economics unpacks these questions and examines what this new wave of …
US ratchets up pressure on Maduro The arrival of the USS Gerald R. Ford, the US’s most advanced aircraft carrier, in Latin American waters this week has added to the military build-up in the Caribbean. In part, this appears to reflect a broader aim by the …
The Hungarian government has announced various fiscal giveaways over recent months, and this week officially revised up its budget deficit targets for both this year and 2026 to 5.0% of GDP. That compares to previous targets of 4.3% and 3.7% of GDP. We …
