UK Economics Update UK Budget 2016 Checklist While we think the UK will do well either inside or outside the EU in the long run, there is potential for a short-term hit to investment in particular. But we don’t think that this would derail the... 15th March 2016 · 1 min read
Asia Data Response Sri Lanka GDP (Q4) Today’s GDP figures suggest Sri Lanka’s economy slowed sharply in the fourth quarter of 2015. However, we would be wary of reading too much into the data, given the serious doubts that remain over the... 15th March 2016 · 1 min read
Latin America Data Response Mexico Industrial Production (Jan.) The return to growth in Mexican industrial production at the start of this year is encouraging, but the underlying trend is still weak. What’s more, the pick-up was due to an improvement in mining and... 11th March 2016 · 1 min read
UK Economics Weekly Fiscal policy won’t provide support for the recovery The two main events this week – the Budget and MPC decision – will highlight the divergence between monetary and fiscal policy stances. With Bank Rate likely to be held at 0.5%, marking seven full... 11th March 2016 · 1 min read
Japan Economics Weekly Should the Bank of Japan write off its JGB holdings? At first glance, a write-off of the Bank of Japan’s huge JGB holdings offers a simple solution to the country’s debt problem. But it is not clear that such a drastic step would actually help... 11th March 2016 · 1 min read
UK Economics Focus Budget 2016 Preview With the Chancellor constrained by both the public finances and a desire not to rock the boat ahead of the EU referendum, this Budget is unlikely to be a radical affair. Any changes to the borrowing... 9th March 2016 · 1 min read
Global Economics Update Are negative policy rates a plus for the world economy? Negative interest rates have come under attack recently, but in our view most of the criticisms are over-stated. In particular, the costs of negative rates for commercial banks appear to be very small... 8th March 2016 · 1 min read
Middle East & North Africa Economics Update Storm clouds gather over Lebanon Recent announcements by the Gulf countries that they will cut off financial support to Lebanon and slap a travel ban on the country are likely to have a larger political than economic impact. But if... 8th March 2016 · 1 min read
China Economics Update Initial thoughts on the National People’s Congress Official statements at the National People’s Congress have signalled, as expected, that the immediate economic priority is to support growth including with a looser fiscal stance and more monetary... 7th March 2016 · 1 min read
Canada Economics Weekly Deficit paranoia is mind-bogglingly stupid The hysterical response to the news that the Federal budget deficit might increase to as much as $30bn next year left us shaking our heads in dismay. Canadian economists are still stuck in the Paul... 4th March 2016 · 1 min read
UK Economics Weekly Take referendum propaganda with a pinch of salt Capital Economics does not have a strong axe to grind either way on the EU question. But we do feel that many of the arguments put forward on both sides are exaggerated – including those from the... 4th March 2016 · 1 min read
Emerging Europe Economics Update Taking stock of Law and Justice’s first few months in power Poland’s Law and Justice Party has had a whirlwind first few months in power and, in this Watch, we look at the policies introduced so far. The short point is that fiscal measures have been more or... 3rd March 2016 · 1 min read
China Economics Update What to watch at the National People’s Congress China’s annual National People’s Congress starts on Saturday. Among the headline announcements are likely to be GDP growth targets for this year and beyond that are unrealistically high and will do... 2nd March 2016 · 1 min read
India Economics Update Finance ministry’s revenue assumptions look too optimistic Finance Minister Arun Jaitley’s budget on Monday was well received, with targets for further reductions in the deficit left unchanged and projected spending in key areas ramped up. But the plans are... 2nd March 2016 · 1 min read
UK Economics Focus Short-term costs of a Brexit wouldn’t derail recovery Although we think that the UK will do well in the long run whether inside or outside of the EU, there is clearly potential for a disruptive short-term impact from the uncertainty that would be seen... 2nd March 2016 · 1 min read
UK Economics Update Could savings on EU contributions boost the economy? One of the advantages of a vote to leave the EU would be the savings the UK could potentially make on its EU contributions. This money could in theory be used to give a boost to the economy, but there... 1st March 2016 · 1 min read
