Israel's election on 27th October is the first since the Gaza and Iran wars began, and Prime Minister Netanyahu appears at risk of losing power. Our Middle East and Markets teams hosted an online briefing on, Tuesday 20th October , that discussed the …
14th October 2026
The Bank of Uganda’s (BoU) decision to raise its policy rate by 225bp to 12.00% at an unscheduled meeting today underscores the deterioration in the country’s external position. So long as global energy prices remain elevated and authorities are reluctant …
Hot US inflation data has put an October Fed hike back on the cards and sparked a dual sell-off in stocks and bonds. Our base case is for both to rally into year-end, but today’s news is another sign that risks look skewed towards further weakness in …
John Healey's first Budget is being watched closely as a statement of intent for the Burnham government. But intent has to be funded, and it comes at a moment when markets are already nervous about the path of government borrowing. On Thursday 22nd …
9th October 2026
Overview – Despite the recent run-up in Treasury yields, we aren’t expecting a major impact on commercial real estate cap rates as we anticipate this will be merely a short-term spike in bond yields. But sentiment has weakened and this will slow the …
Broadening core inflation pressures mean the Fed may have to go further than we forecast The upside surprise to core CPI in September was broad-based rather than due to any obvious temporary factors, therefore bringing an October rate hike back into …
Paris office values are set to fall by almost 10% peak-to-trough – the largest decline in the euro-zone – as weakening prime rental growth combines with sharper rises in yields than in other markets. The downward revision to our expectations for Paris …
Credit growth slips to another record low Broad credit growth fell to a fresh record low last month, dragged down by continued weakness in bank lending. Household borrowing remained the main drag, reflecting weak appetite for debt-financed consumption and …
EM growth appears to have weakened in Q3 but we think it will accelerate this quarter. Inflation is set to rise further and, with policymakers turning cautious, we have pencilled in further rate hikes into our profiles in a few countries. The balance …
Egypt’s public finances still look poor on the surface, but there are reasons to think that the public debt burden will decline over the coming years. That will have positive spillover effects, supporting a pick-up in GDP growth once the effects of the …
The Monetary Authority of Singapore (MAS) left monetary policy settings unchanged today, and we think they will remain on hold in the near term. Although growth should remain strong, inflation is unlikely to become a major policy concern. The decision was …
Trade boom shows no sign of slowing China’s trade growth strengthened further in September, with both exports and imports expanding rapidly. Higher prices of semiconductors and key commodities are flattering the figures, especially on the import side. But …
Oil keeps inflation higher for now Higher global energy prices continued to push up producer price inflation in September, but the impact was limited to a few narrow areas. Consumer price inflation also picked up, but core inflation was flat, pointing to …
Euro-zone spreads and the euro have stabilised over the past couple of days and plenty of bad news on French politics now appears priced in. That said, it is hard to make an optimistic case for the euro in the near term. It sometimes seems as though, over …
13th October 2026
Sales edge up from extremely low levels While existing home sales edged up in September, the bigger picture is that they remain below the 4m annualised mark associated with a very weak market, weighed down by elevated mortgage rates. Moreover, with …
Bond markets are a long way from needing ECB intervention – in the recent past, policymakers have only got twitchy when 10-year sovereign spreads were around 250bp . If spreads approached those levels, for example due to a fiscal crisis in France, the …
We estimate that direct AI investment effects have contributed 0.3%-points to GDP growth over the past year while the wealth effects on consumption have been of a similar size. If equity values fall sharply next year as we assume, then the reversal of …
Our base case is that the Chancellor will not loosen fiscal policy by much at the Budget on 28 th October, preventing a bond market backlash. But his margin for error is small, and a loss of investor confidence is a key upside risk to our forecast for the …
Overview – The upward revisions to our Bank Rate and gilt yield forecasts due to the ongoing energy price shock suggest higher mortgage rates will remain a drag on housing for longer. Our forecast is for house prices to rise by 1.5% in 2027 (2.5% …
This note summarises the key conclusions from our recent series on China Shock 2.0. The ongoing shock is not simply a repeat of the original China shock of the 2000s. China is once again increasing its share of global manufacturing and exports but it is …
India’s transition to Expected Credit Loss (ECL) provisioning in April 2027 will reshape how banks account for risk. By requiring forward-looking loss estimates rather than waiting for defaults to materialise, the new framework should reduce the …
There are no signs that higher interest rates are resulting in tighter financial conditions or weighing on activity. Given that the recent pick-up in inflation has much further to run, the risks are increasingly tilted towards more BoJ rate hikes than …
Inflation concerns keep RBA on a hawkish footing While the Board continued to strike a hawkish tone in September, we’re sticking to our view that the cash rate has already peaked. The minutes of the RBA’s September meeting confirmed that the decision to …
House price growth in Korea has accelerated, but the renewed strength is largely confined to Seoul. This is a concern for the central bank but, for now, we think officials are more likely to tighten macroprudential policy further than raise interest rates …
12th October 2026
The rise in services inflation in South Africa has grabbed the attention of the Reserve Bank but we don’t think it is currently high or widespread enough to prompt further rate hikes. And, so long as energy prices fall back, we still there’s a strong case …
The EU-China deal on plug-in hybrids is another step to strengthen EU trade defences and also offers a blueprint for future deals, but it is still consistent with the EU moving in a targeted and gradual manner. This approach will limit the impact of the …
The recent Houthi attacks on Saudi Arabia’s capital, Riyadh, threaten to set back the recovery in the Kingdom’s non-oil economy, even if the damage to the tourism sector proves to be limited. The key risk, though, is that these attacks raise the risk of …
The macro and market backdrop continues to unsettle global commercial property. In this concise online briefing on Monday 19th October , our Commercial Real Estate team talked through their latest forecasts and answered your questions while they addressed …
India’s headline consumer price inflation jumped to an almost two-year high of 5.5% y/y in September and is poised to rise further over the coming months. The RBI began its tightening cycle last week and given the strength of inflation pressure, the risk …
We will be discussing what happened in the Budget and answering your questions in a 20-minute online Drop-In briefing at 3pm GMT on Wednesday 28th October (register here ). W e think the Chancellor, John Healey, will opt for a compromise Budget on …
We continue to expect Treasury yields to fall further, although the inflation picture and Fed may be stiff near-term headwinds. Bonds defy the odds Treasuries recovered a bit last week, despite several fresh threats: the Fed’s September minutes were …
Net lending by banks to commercial real estate excluding farms dropped to $7.9bn in September, from $9.8bn in August. Within the total, net lending on multifamily assets saw a $3.8bn increase, similar to the reading for August, while other commercial …
With the Budget delivered, our economists were live within hours of the Chancellor finishing his speech to pick out the measures that matter most. Our UK and Markets teams hosted an online briefing where they answered your questions and discussed topics …
Labour market continues to struggle… The September Labour Force Survey (LFS) came in much weaker than expected, showing employment fell by 68,000 on the back of a 47,100 decline the month prior. (See here .) While a significant portion of the weakness …
Fed signals more tightening The minutes from the FOMC’s 15 th -16 th September meeting showed broad support for further policy tightening. Admittedly, the minutes are backward-looking by nature, and subsequent price and labour market data have come in …
Further tightening lies in store The RBI kicked off its tightening cycle this week with a 25bp hike to the repo rate (to 5.50%), vindicating our long-held view that policy would need to be tightened even as most analysts had initially expected the Bank …
A frequent question we have received in our recent meetings with clients has been “When will Andy Burnham call an election?”. This is despite the Prime Minister saying only a few weeks ago that there will be “no election any time soon” and “yes that’s …
Rate hike odds continue to rise in Poland Governor Glapinski’s post-meeting press conference this week confirmed to us that November is a live meeting for a possible rate hike in Poland, but we think the balance has tilted towards Q1 as the most likely …
What the PBOC gets right and where we disagree Yesterday the People’s Bank of China (PBOC) published a paper giving its view on the renminbi. This was clearly a response to foreign scrutiny over China’s exchange rate policy – in a rare move, the paper was …
Weak LFS suggests October off the table for a hike Large back-to-back employment declines in August and September, alongside a tick up in the unemployment rate to 6.5%, mean it will take a big upside surprise in the September CPI release in a couple of …
This week, Neil Shearing is joined by James Reilly and Jack Allen-Reynolds to unpack the latest bond market sell-off, the forces driving higher global yields, and why equity markets continue to defy expectations. They also examine mounting fiscal concerns …
Investors cheer Brazil’s shift to the right The strong showing for Flávio Bolsonaro in the first round of Brazil’s presidential election, as well as for aligned candidates in congressional races, has been warmly received. (Our initial take on the result …
The recent release of a joint statement by G7 leaders on “global energy security and [energy] market stability” has achieved two things. First, the statement has succeeded in taking export bans off the table (for now at least). After all, with the US …
Upside inflation surprise, but November rate cut still on the cards The rise in Brazilian inflation in September, to 4.6% y/y, was largely driven by the unwinding of the electricity discount in August and is unlikely to worry the central bank. We think …
Le Pen speech a mixed bag Marine Le Pen’s speech, in which she presented a “counter-budget” for 2027, combined implausible fiscal promises with potentially significant proposals to rein in France’s budget deficit. Beginning with her comments which will …
The service brings together Capital Economics’ best-in-class research and proprietary data with Fathom Consulting’s scenario modelling and in-depth insight on China. It contains six thematic scenarios, with detailed forecasts and analysis of what each …
Capital Economics is delighted to announce a new partnership with Fathom Consulting to produce a China Economic Scenarios service. The service brings together Capital Economics’ best-in-class research and proprietary data with Fathom Consulting’s scenario …
