Past shocks – domestic and external – have tended to lead to large falls in Egypt’s currency and a sharp slowdown in growth. But the economy looks better placed to weather the current spillovers from the Iran war. We anticipate a more modest slowdown this …
3rd June 2026
While we suspect the labour market is too weak to generate big second-round effects, the inevitable rise in CPI inflation from 2.8% in April to a peak of 4.0% early next year under our baseline scenario for energy prices will present a test of nerve for …
Europe Commercial Property Chart Pack (Q2 2026) …
We still think China’s equities will benefit from the AI boom and fare well over the rest of the year, but their poor profitability is a growing challenge. China’s equity market has had mixed fortunes in recent months, lagging its booming regional …
Economy still shrugging off the Iran war The PMIs suggest that China’s economy accelerated in May, with the import price shock from the Iran war moderating, external demand holding up well and AI-related spending boosting services activity. Both the …
Slowdown in activity will keep RBA on the sidelines for now The weakness in the Q1 GDP print belies the fact that domestic demand was still growing at a healthy clip. Even so, it increasingly looks like the RBA won’t be in a rush to resume its tightening …
The S&P 500 broke through 7,600 yesterday for the first time ever. With that in mind, has its AI-related surge since the end of 2022 been fuelled by earnings or the price investors are willing to pay for them? That hinges on how you measure things. One …
2nd June 2026
Higher crude oil revenues are likely to allow Ghana’s government to loosen fiscal policy which, taken together with the lagged impact of the large monetary easing cycle, should support the economy. We think growth will hold steady at an above consensus …
All-property valuation scores worsened in Q1 2026 as the Iran war pushed up alternative asset yields. With those yields still elevated as the war drags on, valuations look set to worsen further in Q2 and appraised cap rates will need to rise to correct …
The European Commission’s agreement in principle to unlock €16.4bn of frozen EU funds marks a major step forward for Hungary and would significantly improve the economic outlook. But disbursement is conditional on the implementation of rule-of-law and …
Latin America is seeing a wave of labour market reforms that reduce maximum working hours with no reduction in compensation, which could raise inflation and reduce competitiveness. It appears most likely that the macro effects of the reforms will be …
Soft inflation gives MPC room to avoid hikes Despite hawkish noises from the MPC, the recent softness in the inflation data mean that the central bank will likely hold off from hiking interest rates in the coming months. The decision to keep the policy …
Recent free-trade deals are likely to reinforce rather than reshape the hierarchy of manufacturing ambitions in India . Gujarat and Tamil Nadu remain the states with the strongest medium-term growth prospects. Both have attracted a large share of recent …
Jump in services inflation The further increase in headline and particularly services inflation reinforces the case for the ECB to raise rates next week and suggests that upside risks to inflation may be a little higher than we have assumed. According to …
Lending activity softens amid Iran war Net lending to commercial property totalled around £1.5bn in April, weaker than the strong March reading of £2.5bn. The softer April reading likely reflected a slowdown in the investment transactions underlying the …
This page has been updated with additional analysis since first publication. Weaker consumer spending and housing is surely just around the corner April’s money and lending data suggest that households are responding to the war in Iran by saving a bit …
Australian house prices fell for a second straight month in May, and leading indicators suggest that the decline has further to run. However, with inflationary pressures still running hot, the housing downturn is unlikely to prevent the RBA from hiking …
Solid minimum wage hike adds pressure on the RBA The strong increase in the minimum wage this year makes it more likely that wage growth will overshoot the RBA’s expectations, bolstering the case for additional policy tightening. The Fair Work Commission …
The EM manufacturing PMI for May suggests that industrial activity remains relatively robust amid the ongoing energy price shock, particularly in Asia where the impact has been offset by booming electronics demand. Price pressures softened in May but …
1st June 2026
Ethiopia’s Prime Minister Abiy Ahmed and his Prosperity Party will almost certainly win the election taking place today but the next administration faces a host of challenges. The government still needs to secure a sovereign debt restructuring and cope …
ISM confirms manufacturing sector in cyclical upswing The rise in the ISM Manufacturing Index to a four-year high in May suggests that the sector continues to hold up well, probably because the boost to production from the AI buildout is offsetting the …
Lending by euro-zone banks held up well in the first two months after the Iran war began. But with confidence low, market interest rates rising and the ECB set to start tightening monetary policy next week, credit growth is likely to slow somewhat in the …
The strong showing for right-wing candidate Abelardo de la Espriella in the first round of Colombia’s presidential election will be welcomed by investors. A further rally in the peso and a decline in bond yields are likely later today. If de la Espriella …
A US-Iran peace deal has, yet again, failed to materialise despite reports that one is imminent. But, in spite of another round of tit-for-tat attacks over the weekend, market participants continue to operate on the assumption that, sooner rather than …
Economy stuttering and unbalanced The slowdown in Turkish GDP growth in Q1, to 2.5% y/y, shows that the economy was struggling going into the energy shock. At the margin, this outturn may make the central bank less likely to hike interest rates at its …
This page has been updated with additional analysis since first publication. Resilience of house prices to higher mortgage rates starting to fade The bigger-than-expected fall in the Nationwide measure of house prices in May brings the index more into …
The manufacturing PMIs for May suggest that the drag from higher energy prices is being offset by booming electronics demand, although price pressures across the region remain elevated. The May manufacturing PMIs that were published for Korea, Vietnam, …
Price pressures not yet raising alarm bells As one of the FOMC’s more dovish members, the hawkish comments from Fed Governor Lisa Cook this week lend some support to the view that the Fed’s next move is more likely to be a rate hike than a cut. Cook made …
29th May 2026
The surprise 0.1% annualised decline in first-quarter GDP stole the headlines this week, resulting in two consecutive contractions and prompting claims that the economy has fallen into a “technical recession”. The reality isn’t that bad, with the prior …
Strait reopening to turn SARB focus to food inflation Growing hopes for a deal between the US and Iran may help to remove one of the key inflation risks highlighted by the South African Reserve Bank this week. Even if a strong El Niño develops – another …
This Weekly Roundup highlights our analysis on what could happen if the Strait of Hormuz reopens, where global inflation is heading, why shrinking the Fed's balance sheet won't work, how to lower China's saving rate and whether inflation is a threat to …
With consumers cutting back discretionary spending as real incomes come under pressure, demand for leisure assets will be subdued over the next year or so. But longer term the future for the sector looks brighter. As real incomes recover, we expect …
Since the outbreak of the Iran war we have increased our forecast for the aggregate euro-zone fiscal deficit this year from around 3% to 3.5% of GDP. Increased borrowing is not a major worry for investors at this stage but it could become a more serious …
This could prove another false dawn, or the US and Iran could finally reach an agreement to reopen the Strait of Hormuz to oil and gas shipments. But even if the strait reopens, energy flows, oil prices and, by extension, inflation won’t snap back quickly …
China Chart Pack (May 26) …
Colombia’s polarised election Colombians head to the polls on Sunday to elect a new president, with the race effectively a three-way contest between left-wing candidate Iván Cepeda – a close ally of incumbent President Petro – and right-wing rivals de la …
No final decisions are likely at today’s meeting of European Commissioners about EU trade policy, not least because this is a preparatory event ahead of a ministerial meeting on 18 th June. But the event should lay the ground for a further tightening of …
“Recession” already over amid rising oil and gas activity The trade-induced contraction in GDP last quarter meant the economy tipped into a technical recession at the start of the year. But rising oil and gas activity mean this is certain to already be …
Weak activity data in Korea The Bank of Korea left interest rates unchanged at its meeting yesterday, but its hawkish tone suggested that it is only a matter of time before rates are hiked. (See here .) The central bank appeared especially concerned …
Growth accelerates, June rate cut now in doubt The acceleration in GDP growth in Brazil, to an above-consensus 1.1% q/q in Q1, comes alongside a further increase in inflation and a continued strong labour market at the start of the year, and is likely to …
Euro-zone inflation rose again in May The national HICP data for May suggest that euro-zone headline inflation edged up from 3.0% in April to 3.1%. If oil and natural gas prices remain around current levels or fall back, energy inflation will already have …
Industrial sector defies the energy price shock Data published this week showed that industrial profit growth accelerated to a 29-month high in April. (See Chart 1.) That may seem surprising given the energy cost shock from the Iran War which, judging …
In a previous UK Economics Weekly from 13 th March titled “Middle East conflict already hurting the UK economy”, we pointed out that the renewed stagflationary pressures due to the rise in energy prices were starting to show up via higher petrol/diesel …
Limited macro fallout if rupee drops further Having not risen for the best part of four years, pump prices in India have now been hiked four times in the past two weeks, with both petrol and diesel prices now around 8% higher than they were at the start …
The art of the memorandum of understanding Oil prices have fallen throughout the week in anticipation of the US-Iran deal to extend the ceasefire by 60 days, reported yesterday, with Brent crude down ~10% since last Friday. The memorandum of …
The mismatch between oil supplied and consumed in China suggests that inventories are being drawn down there, which has eased the upward pressure on global oil prices. Against the backdrop of the US-Iran negotiations, the drawdown of oil inventories in …
All of our coverage on the Middle East conflict can be found here . Currency strength opens the door to easing Interest rate decisions in Israel and Hungary this week struck a dovish tone, with Israel’s central bank cutting rates and Hungary’s signalling …
