Global Economics Update Are we sliding towards fiscal dominance? Strictly speaking, recent measures by the Bank of England do not qualify as so-called “fiscal dominance”. But this could be the thin end of the wedge, and not just for the UK. While we are a long way... 13th October 2022 · 7 mins read
India Economic Outlook Pace of tightening set to slow The RBI has frontloaded policy tightening over recent months but with inflation peaking and economic headwinds building, we think the central bank will now slow the pace of tightening and revert to... 13th October 2022 · 20 mins read
Middle East & North Africa Economics Focus Egypt to suffer short-term economic pain Spillovers from the war in Ukraine and tighter external financing conditions have exacerbated strains in Egypt’s balance of payments and we think the pound needs to fall a lot further. This will add... 13th October 2022 · 15 mins read
UK Economics Weekly Three possible flashpoints for the markets The end of the Bank of England’s gilt purchases (14 th October), the publication of the Chancellor’s Medium-term Fiscal Plan (perhaps late this month) and the Bank of England’s next monetary policy... 7th October 2022 · 10 mins read
Canada Economic Outlook Modest recession could morph into something worse The jump in interest rates and worsening global backdrop leaves the economy facing recession, and elevated debt levels are a downside risk to our forecast for a moderate peak-to-trough fall in GDP of... 6th October 2022 · 20 mins read
US Economic Outlook Recession will add to disinflationary pressure We expect inflation to fall more rapidly than the Fed anticipates, albeit partly because the even-bigger surge in interest rates will send the economy into a mild recession early next year and drive... 5th October 2022 · 24 mins read
Europe Economics Update Germany €200bn fiscal shield won’t prevent recession Germany’s huge off-budget facility designed to compensate households and businesses for the increase in energy prices is bigger than measures announced elsewhere. However, we don’t expect actual... 5th October 2022 · 3 mins read
Japan Economic Outlook Bank of Japan will remain the outlier In a difficult global environment, Japan's economy has benefitted in recent months from a reopening boom in consumption and the easing of supply shortages in industry. Those tailwinds will soon fade... 5th October 2022 · 24 mins read
Africa Economics Weekly Politics and fiscal policy moving in tandem Political considerations ahead of key elections in South Africa and Nigeria are likely to add to reasons to loosen fiscal policy over the coming quarters. And while that may support activity in the... 30th September 2022 · 5 mins read
UK Economics Weekly Five ways the gov’t-induced turmoil has altered our thinking We don’t know yet if the PM and Chancellor installed just three weeks ago will survive the crisis. But the legacy of the Chancellor’s mini-budget on 23 rd September and the resulting events of this... 30th September 2022 · 5 mins read
Long Run Update Has the shift in fiscal policy altered the UK’s prospects? In view of the wider interest, we are also sending this Long Run Update to clients of our UK Economics Service. If the UK government’s “new era of fiscal policy” boosts GDP growth as planned, the UK’s... 30th September 2022 · 3 mins read
Global Economics Update European households’ costs to soar despite fiscal aid The sharp increases in gas and electricity prices in Europe mean that households there – particularly in Germany and Italy – will see a steep rise in their costs of energy consumption. Accordingly... 28th September 2022 · 7 mins read
Capital Daily US equities don’t seem to be factoring in a gloomier economy The plunge in the stock market in the US that has accompanied the recent ratcheting up of rate expectations there has been partly blamed on concerns that more aggressive Fed tightening is undermining... 28th September 2022 · 6 mins read
Asset Allocation Update Fiscal credibility key for Gilts & sterling Although the latest sell-off in Gilts has been driven in part by expectations for higher interest rates, the accompanying fall in sterling suggests the risk premia attached to UK assets has risen. In... 27th September 2022 · 5 mins read
UK Economics Update Rates to rise to 5% to offset loose fiscal plans and low pound In response to the government’s loose fiscal plans and the resulting weakening in the pound, we now think that interest rates will rise from 2.25% now to a peak of 5.00% (4.00% previously). Rates at... 27th September 2022 · 6 mins read
