Inflation easing, but rates to remain on hold for now The small fall in inflation in Brazil, to 5.1% y/y in August, is unlikely to change the central bank’s tone at its meeting next week. Interest rates will remain on hold at 15.00%. But with inflation …
10th September 2025
Poland has ramped up defence spending faster than any other NATO country in the past few years, but we estimate that the boost to GDP growth has been less than 0.2%-pts per year. A high reliance on imports as well as structural weaknesses in Poland’s …
Concerns that Indonesia’s government will breach it’s 3% of GDP budget deficit rule have only grown after the replacement of respected Finance Minister Sri Mulyani. While the fiscal risk premium in Indonesia’s sovereign dollar bonds appears to have …
The weak labour market means it’s too soon to conclude that the share of mortgages in arrears won’t rise further, although it will remain low relative to past standards. The number of mortgages in arrears, defined as the borrower failing to make …
Overview – After an exceptionally strong first half of 2025, India’s economy faces a more challenging rest of this year and 2026 in the face of punitive US tariffs. But they could get rolled back and, even if they don’t, India will remain a relative …
The number of visas granted to foreign students looking to study in the UK saw a substantial rise in Q2, likely reflecting a substantial fall in the numbers entering the US as restrictions there have been tightened. While the UK government may respond by …
This Update answers the key questions on recent developments in Indonesia and the implications for fiscal and monetary policy, as well as the country’s financial markets. We discussed many of these points in a Drop-In yesterday, a recording of which can …
The Organisation of the Petroleum Exporting Countries (OPEC) shows no signs of slowing down in its “golden years”, but question marks about the future of oil demand, as well as the resilience of non-OPEC supply, will weaken the economic ties that bind the …
Inflation fall gives CBE room to push ahead with rate cuts Egypt’s headline inflation rate decreased from 13.9% y/y in July to 12.0% y/y in August, its slowest pace since March 2022, which supports our view that the Central Bank of Egypt (CBE) can …
Uptick in underlying inflation still on shaky foundations Headline CPI inflation slipped back into negative territory last month, but this just reflects volatile food prices. Underlying inflation has actually ticked up lately. This is mostly due to …
The (largely expected) fall of the French government has made limited impact on euro-zone financial markets. But it represents another step in the gradual deterioration of the outlook for French government bonds . We continue to think that the spread …
9th September 2025
This page has been updated with additional analysis since first publication. Preliminary revision points to weaker recent employment growth The preliminary benchmark estimate points to a massive 911,000 downward revision to the level of non-farm payroll …
Economic growth has been fairly resilient to tariffs so far and, as long as tariffs stay around the 15% agreed in the EU-US trade deal, the hit to activity should be small. But growth will be sluggish over the rest of this year and next as low confidence …
Nigeria policy shift has led to success in monetary policy reform and a stronger balance of payments position. But reforms have so far fallen short is reining in the large budget deficit. While non-oil revenues have increased and our base case is that the …
Uptick in inflation won’t prevent Banxico from cutting again The small rise in Mexican inflation to 3.6% y/y in August still leaves the headline rate within Banxico’s target range and means that policymakers are likely to deliver another 25bp cut, to …
This Update answers the key questions that we received during this morning’s online Drop-in on the collapse of France’s government. (The recording is available here .) The key points are that while France is some way from a fiscal crisis, political …
Concerns about the independence of Bank Indonesia have grown following the announcement of a fresh “burden-sharing” agreement with the government and, most recently, the removal of respected finance minister Sri Mulyani from her post. The experience from …
Recovery back on, but likely to be bumpy from here South Africa’s economy expanded by 0.8% q/q in the second quarter of the year, an acceleration on the muted 0.1% expansion in Q1, raising hopes that the recovery is back on track. We expect further modest …
OPEC+ seems to be cautiously optimistic on the strength of the oil market as it remains committed to unwinding voluntary output cuts. However, we suspect it will become increasingly clear that the oil market cannot fully absorb additional supply at …
8th September 2025
Markets appear concerned that Prime Minister Ishiba’s successor will put pressure on the Bank of Japan to keep interest rates low. But available precedents suggest that the Bank would not be easily coerced. If anything, the prospect of looser fiscal …
Downside inflation surprise narrows the odds for a cut at tomorrow’s meeting The larger-than-expected fall in Chilean inflation, to 4.0% y/y, increases the chance that the central bank delivers a 25bp interest rate cut at tomorrow’s meeting. That said, …
Geopolitics has reshaped the world since 2016 Trump’s first term was defined by a deepening rift with China. By the eve of the pandemic, the US had imposed tariffs on two thirds of Chinese imports and curbed US firms’ dealings with companies such as …
Launching a book is never straightforward. It requires planning, persuasion – and sometimes a bit of luck. I have been fortunate on that front this past week with two events in China providing striking images that neatly captured the subject of my new …
Departure of respected Sri Mulyani will raise concerns over direction of fiscal policy The removal of Indonesia’s well-respected Finance Minister Sri Mulyani from her post will raise concerns that, in the wake of recent protests in the country, President …
We still think the 10-year government bond yield in Japan will finish this year higher than that in China, as the former rises further and the latter resumes its downward trend. Much attention has been on US Treasuries lately, with the latest news a soft …
German industry resilient to tariffs but output still weak German industrial production rose in July and the outturn for June was revised up suggesting that the sector has been resilient to tariffs after all. But output was still weak by past standards. …
Exports set to slow further before long Exports were broadly unchanged last month – the slowdown in headline y/y growth was just a base effect. But with the temporary boost from the US-China trade truce fading and the US raising tariffs on shipments …
Group Chief Economist Neil Shearing tackles that weak US August Employment report, previews the coming week’s inflation data, talks about what’s been happening in the bond market and explains just what recent get-togethers in China signal about a new …
5th September 2025
Another soft non-farm payrolls report has put the dollar on the backfoot again, but given the extent of Fed easing already discounted we continue to think the greenback will remain rangebound over the coming weeks. While weak employment growth points to …
Another weak US Employment Report has knocked risk appetite, but a lot of optimism is still baked in. While that raises the prospect of a more serious blow to markets should economic data sour , our sense is that investors’ optimism is largely justified. …
Broad-based labour market weakness The August Labour Force Survey was weak, with employment falling by 66,500 and the unemployment rate rising to a four-year high of 7.1%. While the Bank of Canada always expected some weakness in tariff-impacted sectors …
War on drugs redux The US’s focus on drug trafficking in Latin America intensified this week. The US Navy sank a ship accused of being used by the Venezuelan Tren de Aragua gang. Secretary of State Marco Rubio and Mexican President Sheinbaum agreed this …
Trump appeals to Supreme Court on tariffs The conventional wisdom is that President Trump has pushed well beyond the established bounds on executive power in his second term. In a number of areas, including tariffs, deportations, the use of the military …
Putin meets Xi and Modi in Tianjin … Russia’s relations with China and India were on full display as their leaders met this week, and the diplomatic cohesion projected by the three countries provided somewhat of a kick in the teeth to the US. One of the …
Tariffs aren’t to blame for manufacturers’ struggles According to a Reuters report on Thursday, BYD has slashed its 2025 sales target by around 15%, having met only half of its original annual target over the first eight months of the year. This comes …
The Chancellor, Rachel Reeves, may be a bit happier at the end of this week than she was at the start. The sell-off in the government bond market over the last month appears to have abated a bit. (See Chart 1.) And she will hope that her decision to hold …
Angola: oil sector turnaround seems a while away Angola’s economy is being weighed down by problems in its oil sector, and while a swathe of investment announcements from multinationals this week will help, it will take time realise results. Lower oil …
Employment shocker makes September cut look almost certain The second consecutive large fall in employment together with the renewed rise in the unemployment rate underscore that conditions in the labour market remain bleak amid the impact of US tariffs. …
Modest rise in unemployment rate will cap September rate cut at 25bp While the weak 22,000 gain in non-farm payrolls in August confirms what already looked a nailed-on rate cut at this month’s FOMC meeting, the limited rise in the unemployment rate to …
Yields on long-dated government bonds have been a talking point for investors again this week but we don’t think the increase will have much impact on the economic outlook. The increase in 30-year yields has not been as large in the euro-zone as in the …
What’s Polish for “gold bug”? Central banks’ appetite for gold has been under the spotlight in recent years and, along with deepening concerns about fiscal sustainability , has been one of the factors behind gold’s sustained rally to a fresh nominal …
House prices in the euro-zone are increasing quite quickly, but we doubt that this will last. So rising house prices will provide only limited support to household consumption and investment in the coming quarters. After falling in 2022 and 2023 as the …
Many of the conditions which have led to fiscal crises in the past are now in place. This does not mean a fiscal crisis in the UK is imminent or inevitable. The missing ingredient is a trigger. If a UK fiscal crisis does erupt, it’s as likely to come from …
Data released this morning confirmed that the euro-zone economy has been resilient so far in the face of US tariffs and related uncertainty. But the latest surveys point to weak growth in Q3. The third estimate of euro-zone GDP in Q2, published this …
GST changes to provide small consumption boost Finance Minister Nirmala Sitharaman this week provided details of the changes to the Goods and Services Tax (GST) that had been pledged by PM Modi in his Independence Day Speech in August. As of 22 nd …
This interactive dashboard allows you to explore all of our forecasts and key data for European residential property. If you have subscriber access to the data underlying this dashboard, you can download it via the menu options in the top right of each …
Inflation very low Indonesia, Korea, Thailand, the Philippines and Taiwan all published August inflation figures this week, and the data were weak across the board. Thailand was in deflation for a fifth consecutive month, while the headline rate was …
This page has been updated with additional analysis since first publication. Tax rises may hold back retail and housing The rises in retail sales volumes in July and the Halifax measure of house prices in August suggest the economy maintained some decent …
