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In UK PM race, tax cuts are a distraction from economic challenges

Posted by Neil Shearing | Category : The Chief Economist's Note.

This is not a grown-up race for the Conservative party leadership. A grown-up race would involve grown-up debate around the economic policies needed for the UK to secure sustainable growth in its future. Instead, we have the unedifying spectacle of two candidates battling almost exclusively on who can deliver the biggest tax cuts and when. … Continue reading “In UK PM race, tax cuts are a distraction from economic challenges”

Pragmatic Prime Minister is needed to navigate recession

Posted by Paul Dales | Category : Capital View.

There’s a high chance that the first task of either Liz Truss or Rishi Sunak as Prime Minister will be to navigate the economy through a recession. That will require them to relinquish their dogmatic approaches to tax and adopt more practical policies to minimise the damage. CPI inflation was at a 40-year high of 9.4% in June and will probably increase to … Continue reading “Pragmatic Prime Minister is needed to navigate recession”

The ECB’s got 99 problems but a weak euro ain’t one

Posted by Neil Shearing | Category : The Chief Economist's Note.

Next week marks the tenth anniversary of Mario Draghi’s pledge to do “whatever it takes” to save the euro. That was the line-in-the-sand moment that paved the way for policies that eventually brought an end to the crisis which had engulfed the euro-zone. A decade later, the single currency again finds itself in the crosshairs, … Continue reading “The ECB’s got 99 problems but a weak euro ain’t one”

From deglobalisation to outright fracturing – the global economy’s post-pandemic, post-Ukraine reality

Posted by Neil Shearing | Category : The Chief Economist's Note.

The one-two punch of the pandemic and war in Ukraine has fundamentally shifted the narrative around globalisation. In 2019, the research prepared for our annual ‘Spotlight’ event explained why we thought globalisation had peaked and how the risks of deglobalisation were being underappreciated. While many of the risks we warned about have crystallised, the era-defining … Continue reading “From deglobalisation to outright fracturing – the global economy’s post-pandemic, post-Ukraine reality”

Housing downturn will deepen – but this isn’t 2008

Posted by Neil Shearing | Category : The Chief Economist's Note.

Central bankers giveth and central bankers taketh away. It was their low interest rate policies which helped fuel an extraordinary – and extraordinarily global – rise in house prices. As a generational rise in inflation brings that low-rate era to a rapid close, our earlier warning that housing markets would prove most vulnerable to policy … Continue reading “Housing downturn will deepen – but this isn’t 2008”

Japan will find it harder than China to buck the global tightening trend

Posted by Neil Shearing | Category : The Chief Economist's Note.

This is being called a global monetary tightening cycle – but it’s not strictly “global”. While 41 of the 50 central banks under our coverage have raised rates so far, and we expect others to join them – most notably the European Central Bank – the People’s Bank of China (PBOC) and Bank of Japan … Continue reading “Japan will find it harder than China to buck the global tightening trend”