After moving in broadly the same direction for much of 2022, we think that the returns from “safe” assets will generally diverge from those from “risky” assets between now and around the middle of next year. We suspect that long-dated government bond …
1st November 2022
Overview – Despite the onset of a global recession, we think that energy prices will remain historically high in 2023 owing to severe supply constraints. The next round of EU sanctions on Russia’s oil and product exports, coupled with the output quota cut …
31st October 2022
Overview – The jump in market interest rates following the ill-advised “mini” budget has forced quoted mortgage rates up to over 5%, a level not seen since 2009. That will turn the slowdown in demand already evident in the survey data into a collapse, as …
We think the recent rallies in government bond markets will gain steam next year as inflationary pressures ease and central banks, especially the Fed, turn less hawkish. But, while rising real yields have probably been the biggest headwind for “risky” …
28th October 2022
Table of Key Forecasts Overview – EM GDP growth has slowed sharply this year and is likely to remain sluggish in 2023 and 2024 as weak external demand and tight financial conditions take their toll. Having started hiking rates much earlier than their DM …
27th October 2022
Overview – Sub-Saharan Africa has suffered particularly heavily from the pandemic and then spillovers from the war in Ukraine, and the global recession will only add to the headwinds. Taken together with tight fiscal and monetary policy, we hold a …
Prospects for economic activity have deteriorated further in recent months as headwinds to growth have become stronger. Inflation looks set to remain high for longer, eroding households’ real incomes; monetary policy is being tightened further and …
25th October 2022
Table of Key Forecasts Global Overview – Persistently high inflation and more aggressive monetary policy tightening now seem set to cause a global recession. While we had previously anticipated contractions in several economies, the gloom has spread …
Overview – Economic growth in most countries looks set to slow sharply next year as weaker exports and higher interest rates weigh on activity. With price pressures starting to ease, we expect central banks to begin to shift their focus from containing …
24th October 2022
Download the full report here . Overview – The Gulf states will continue to lead the pack, but growth is set to slow next year by more than we had previously expected due to oil output cuts. In North Africa, balance of payments strains should ease, and …
21st October 2022
Overview - We expect greater stimulus next year. But with the zero-COVID policy here to stay, an abrupt turnaround in property construction unlikely and exports set to fall, policymakers face an uphill battle. Growth will remain depressed. Consumer …
Overview – The drag on the economy from CPI inflation being stuck at 10% for a year and interest rates rising to 5.00% will be enough to trigger a recession that involves real GDP declining by around 2.0% from its peak to its trough. What’s more, …
20th October 2022
Overview – The euro-zone is on the cusp of a significant recession due to a severe squeeze on households’ real incomes, rising interest rates and weak external demand. We now think GDP will fall for the next three quarters and will recover only …
Overview – Latin America is running into a growing set of headwinds, from the global recession to lower commodity prices to tight policy at home. We expect recessions in Chile and Argentina, and our growth forecasts across most of the region for 2022-23 …
19th October 2022
Overview – Emerging European economies are facing a difficult winter due to the energy crisis as well as headwinds from weakening demand for exports and tightening external financing conditions. We expect almost all economies in the region to experience a …
13th October 2022
Overview – 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 25bp hikes. Our forecast is for the repo rate …
Overview – Soaring interest rates and falling real incomes will result in a more pronounced slowdown in economic activity in both countries than most anticipate. In fact, we now expect New Zealand to enter a recession next year as the RBNZ will hike …
12th October 2022
Overview – 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 1.0%. For now, our expectation that …
6th October 2022
Overview – 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 up the unemployment rate. As a result, we …
5th October 2022
Overview – 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, while external demand will slow. As a …
Overview – The overriding story this quarter is that although weak demand and steady inventory growth in the next couple of years will push up vacancy in many metros, we still see asking rents growing solidly as firms compete up rents on new, high …
23rd September 2022
Overview – A further deterioration in the economic backdrop is set to weigh on property rental growth, especially in the consumer-facing retail sector where we have revised down our rental forecasts in the near term. This comes at a time when higher …
Overview – The latest data suggest that a property repricing is already underway in response to higher interest rates and stretched valuations. We expect a cumulative rise in all-property yields of 35bps-40bps across the Scandinavian and Swiss markets …
22nd September 2022
We expect a sharp slowdown in apartment rental growth across the board, as job growth slows, affordability constraints bite and an influx of supply pushes up vacancy. But some markets will perform better than others. Rent prospects are strongest in the …
16th September 2022
Overview – The economic backdrop has deteriorated, with the euro-zone set to enter recession this year, while inflation has continued to beat expectations. This will weigh on property demand across all sectors, especially retail, for which we have …
Overview – Higher interest rates mean that real estate looks significantly overpriced in all sectors. The latest activity and performance data suggest that a correction is underway, but as we now think the 10-Year Treasury yield has peaked, we expect the …
9th September 2022
Our forecast that the energy crisis will push the euro-zone and UK economies into recession while the US gets away with a milder slowdown suggests that the euro and the pound will weaken further against the US dollar. We think the pound will fall from …
31st August 2022
Overview – Surging inflation and the upcoming recession will cut real household disposable incomes, which are set to see their largest fall on record. That drop in spending power will hit demand for all property sectors, but consumer-facing sectors …
23rd August 2022
Overview – Despite a reduction in our mortgage rate forecast, affordability is still set to be as stretched as it was during the mid-2000s housing boom. Alongside record-low homebuyer sentiment and a slowing economy, that means we have become more …
12th August 2022
Overview – Tight supply has supported house prices so far, but they now appear to be stalling. Demand will only deteriorate further over the coming quarters as rising mortgage rates, high inflation, and the recession weigh on buyers’ budgets and …
Although we think that we have now passed this cycle’s peak in long-dated US Treasury yields, we still suspect that investors are underestimating just how far the Federal Reserve will raise interest rates, and how long it will be before inflationary …
5th August 2022
We think the dollar will appreciate further through at least the end of the year as the global economy continues to falter and “safe-haven” demand remains strong. Although we see limited scope for a further widening of expected interest rate differentials …
4th August 2022
We doubt the recent rallies in global bond and equity markets will be sustained over the remainder of the year. While we no longer think the 10-year US Treasury yield will exceed its June peak, we still expect it to rise as the Fed delivers a bit more …
3rd August 2022
Overview – While non-energy commodities prices may fall a little further, we think the big move down in those prices is now behind us. Admittedly, the demand outlook has undeniably deteriorated in recent months, but many of the supply risks that prompted …
28th July 2022
Overview – Activity has bounced back from lockdowns but China’s economic recovery will become more challenging from here on as exports turn from tailwind to headwind and the property downturn deepens. Policy restraint means that stimulus will not fully …
Table of Key Forecasts Overview – EM GDP growth will be weaker than most expect in 2022 and 2023 as China’s economy rebounds only moderately and activity slows elsewhere. Inflation is set to remain elevated for some time yet, and policy rates will be kept …
26th July 2022
Overview – Sub-Saharan African economies are suffering heavily from the spillovers from Fed tightening and the war in Ukraine. Policy in the region is likely to tighten further as a result, weighing on growth. Indeed, our growth forecasts for this year …
Table of Key Forecasts Global Overview – The outlook for the world economy has darkened again and we have reduced our forecasts for all major economies, leaving them further below the consensus of economists. We now anticipate recessions in the euro-zone …
21st July 2022
Overview – High energy and agricultural prices helped to cushion Latin American economies over the first half of the year, but the second half will be much more challenging. As growth slows, fiscal concerns are likely to come back to the fore. And in the …
Overview – The spillovers from the war in Ukraine are driving a divergence in the region’s outlook. Higher oil output and looser policy will drive above-consensus GDP growth in the Gulf this year and next. Elsewhere, though, external and debt problems …
The near-term economic outlook has deteriorated in recent months and Switzerland, Sweden, and Denmark are set for mild recessions in late 2022 and early 2023. This is partly a function of external weakness; as highly open economies, the recession in the …
Overview – Economies in Emerging Europe were resilient in the first half of this year, but the outlook has deteriorated markedly as headwinds have strengthened. Inflation is likely to continue rising and we think that GDP will do little more than stagnate …
20th July 2022
Overview – The Bank’s aggressive policy tightening will weigh heavily on domestic demand, with consumption growth set to slow sharply while residential investment plunges back to pre-pandemic levels. There is scope for the economy to avoid recession if …
Overview – Further interest rate hikes are likely across the region in the near term, and we have raised some of our year-end forecasts to reflect growing concern among the region’s policymakers about inflation. However, with economic growth likely to …
Overview – We expect the economy to avoid a recession only narrowly, as higher interest rates trigger a contraction in residential investment and weakness in consumption growth. Core inflation has been stronger than we expected this year but, on balance, …
19th July 2022
Overview – A rise in CPI inflation from the 40-year high of 9.1% in May to a peak of 12% or higher in October will reduce real incomes by enough to mean that a recession now seems inevitable. Our forecast that real household disposable income will fall by …
18th July 2022
Overview – Supply shortages and continued virus caution will result in a weaker recovery in Japan than most anticipate. With wage growth sluggish too, the Bank of Japan won’t see a need to lift its policy rates. However, we expect the Bank to widen the …
Overview – The euro-zone looks on course to fall into a mild recession in the coming quarters. Real incomes are falling, business sentiment has plummeted and growth in the region’s export markets is slowing. Nevertheless, the labour market is likely to …
14th July 2022
Overview – Since the release of our previous Apartment Metro Outlook three months ago the interest rate environment has become more negative for real estate, and we now expect yields to rise in many metros this year and to see further increases in 2023. …
12th July 2022
Overview – Strong economic growth and surging inflation have prompted the RBI to kick-start its hiking cycle and we think the central bank will continue to frontload policy tightening. In all, we think the repo rate will rise by a bit more than the …
7th July 2022
