Europe Economics Spare capacity in labour market mutes wage pressures We now expect the euro-zone economy to grow more quickly this year than the consensus or the ECB expects. Inflation too will be higher than others are forecasting as supply shortages persist into the... 16th July 2021 · 5 mins read
Australia & New Zealand Economics Weekly RBNZ to tighten policy as inflation surges The RBNZ announced an end to its asset purchases at this week’s meeting. And given the Bank’s hawkish tone, along with the strong inflation data in Q2, we now think the Bank will begin lifting... 16th July 2021 · 5 mins read
Australia & New Zealand Economic Outlook Central banks to tighten as bust turns to boom Sydney’s lockdown will keep a lid on Australia’s recovery for now, but booming housing markets should support consumer spending and dwellings investment in both countries. We don’t expect labour... 15th July 2021 · 24 mins read
UK Economics Labour Market (May/Jun.) May’s figures paint a picture of a labour market well on its way to recovery and will further fuel concerns about labour shortages and the possible boost to inflation from higher wage growth. But past... 15th July 2021 · 3 mins read
China Data Response China GDP (Q2), Activity & Spending (Jun.) China’s GDP growth dropped back in y/y terms last quarter as the base for comparison became less flattering. In q/q terms, output rose at a slightly faster pace than in Q1, when a flare-up in virus... 15th July 2021 · 4 mins read
Australia & New Zealand Data Response Australia Labour Market (Jun.) The labour market continued to tighten in June and while the lockdown in New South Wales may result in some bumps over the next couple of months, we expect wage growth to accelerate soon. 15th July 2021 · 2 mins read
US Economics A whiff of stagflation Supply shortages will ease only gradually over the next couple of years, putting sustained upward pressure on core inflation and constraining real activity. We expect core inflation to remain above 3%... 13th July 2021 · 23 mins read
Canada Data Response Labour Force Survey (Jun.) The stronger-than-expected rise in employment in June confirms that labour shortages are not holding back the recovery, but the weakness in hours worked still suggests there are downside risks to our... 9th July 2021 · 2 mins read
Australia & New Zealand Economics Weekly RBA’s central scenario may signal rate hikes soon The RBA began shifting the stance of monetary policy this week by watering down its commitment to keep rates on hold for the foreseeable future. The Bank’s central scenario is still consistent with... 9th July 2021 · 7 mins read
UK Economics Focus Most labour shortages will probably be temporary The widely reported labour shortages should mostly prove temporary. While it may take 6-12 months before some of the underlying causes unwind, recruitment difficulties probably won’t have a long... 8th July 2021 · 13 mins read
Europe Chart Pack Activity taking off as hospitality reopens The economy has continued to rebound strongly as governments have lifted almost all restrictions on retail and restaurants and eased rules on foreign travel. Restaurant bookings are back above pre... 7th July 2021 · 11 mins read
Japan Economic Outlook Faster vaccine campaign allows rapid rebound Japan’s lagging vaccine rollout has finally reached cruising speed, which should allow a rapid recovery in activity over the second half of the year. The labour market may soon be as tight as it was... 7th July 2021 · 22 mins read
Australia & New Zealand Economics Update RBA to hike rates in early-2023 By tapering its bond purchases and watering down its commitment to keep its policy rate unchanged until 2024, the RBA is paving the way for interest rate hikes in 2023. 6th July 2021 · 3 mins read
Japan Data Response Japan Wages & Household Spending (May 2021) While the further acceleration in wage growth in May was again largely down to favourable base effects, we think wage growth will stay elevated as the labour market tightens and vaccines fuel a... 6th July 2021 · 2 mins read
US Economics Weekly Stronger payrolls intensify focus on tapering We aren’t convinced that it will mark the start of a sustained acceleration, but the stronger gain in June payrolls will embolden those Fed officials calling for an earlier end to the Fed’s asset... 2nd July 2021 · 6 mins read
UK Economics No need to fear as furlough enters final furlong We think that concerns about the winding up of the furlough scheme are overdone for two reasons. First, at the end of May only 2.3m people were on furlough and half of them were working at least some... 2nd July 2021 · 7 mins read
