Overview – With inflation rising even further than we had anticipated, both the RBNZ and the RBA will slam harder on the brakes than most anticipate. We expect policy rates to peak around 3.5% in both countries. With the ongoing housing downturns set to …
7th July 2022
Overview – In light of the deterioration in the economic environment, our office metro forecasts have been downgraded across the board. Those downgrades are driven by a substantial shift in our yield view, which mean that capital values in all 17 metros …
1st July 2022
Overview – Weaker economic activity and higher interest rates as a consequence of the war in Ukraine will weigh on property performance in Central and Eastern Europe (CEE). Shifts in investor sentiment and a sharp deterioration in valuations are expected …
30th June 2022
Overview – The rapid turnaround in the interest rate environment has led us to revise down our expectations for property performance in Scandinavia and Switzerland. Property valuations deteriorated sharply in Q1 and are expected to come under more …
27th June 2022
Overview – The weaker economic outlook and larger increases in interest rates are expected to weigh on property performance. With valuations under increasing pressure from sharply rising bond yields, we think that property yields will reach their troughs …
23rd June 2022
Overview – The dramatic shift in the interest rate environment over the first half of the year means that we have brought forward (and increased) our forecasts for yield rises. Property valuations now look as bad as they did in 2007, and with the 10-Year …
21st June 2022
If we are right in expecting inflationary pressure to stay strong even as the economy gets dangerously close to a recession, then the prices of gilts and UK equities will probably fall further over the next year. Our forecast that the Bank of England will …
26th May 2022
Overview – The worsening monetary outlook is expected to weigh on property performance. With inflation set to peak at 10% y/y that will force interest rate to 3.0% next year. This will reverse the recent momentum in the commercial property sector, as …
20th May 2022
Overview – If we are right that the Bank of England will have to raise interest rates to 3.00% to stamp out inflation then we are on the cusp of the fastest increase in mortgage rates since the late 1980s. That caused house prices to fall by 20%. But the …
13th May 2022
Although we suspect that inflation in the US has now peaked, we don’t think that this will prevent either long-dated Treasury yields from rising again or the stock market there from coming under renewed pressure until the middle of next year. Indeed, we …
10th May 2022
Overview – Sub-Saharan Africa’s recovery is likely to remain slow going and our growth forecasts are generally below the consensus. While spillovers from the war in Ukraine will boost a handful of economies – notably Angola and Nigeria – in others, the …
4th May 2022
Overview – The war in Ukraine and its negative impact on commodities supply has prompted us to revise up our forecasts for the prices of most commodities in 2022. Regardless of the outcome of the war, we think energy prices will remain historically high …
29th April 2022
The combination of aggressive tightening from the Fed and worsening risk appetite has driven the dollar to its strongest level, in aggregate, since the early 2000s. While the greenback looks due a pause, we now expect it extend those gains over the coming …
Overview – Mortgage rates have risen faster than we originally anticipated and we now expect them to peak at 5.6% in mid-2023. That’s below the level of around 6% which we think risks tiggering a housing market correction, but higher interest rates mean …
We think the rises in global government bond yields – and falls in equity prices – have not run their course yet. Yields have typically peaked only shortly before the ends of central bank tightening cycles and we doubt this one will be different. We …
Table of Key Forecasts Overview – Lockdowns in China and spillovers from the war in Ukraine will slow the EM recovery and growth is likely to be weaker than most expect. Recession risks are rising in Emerging Europe in particular. On the flipside, …
28th April 2022
Overview – Our GDP growth forecasts are generally above the consensus, but with higher commodity prices and weaker global demand set to weigh on economic recoveries, growth across much of Emerging Asia will be slower than we had anticipated in our last …
The higher prevalence of renewables in the energy mixes than in most of Europe means the squeeze on incomes from higher gas prices will be less acute in Switzerland and the Nordics, and Norway even stands to benefit from elevated commodity prices. But as …
27th April 2022
Table of Key Forecasts Global Overview – We have revised our forecast for world growth this year to further below the consensus to reflect the growing ill effects of high inflation. While inflation should ease as the year goes on, the drag on real incomes …
Overview – Even though a further surge in CPI inflation to a 40-year high of 10% in October will take the economy to the brink of recession, we think the Bank of England will raise interest rates from 0.75% now to a peak of 3.00% in 2023 to contain …
26th April 2022
Overview - China’s economy rebounded sharply from the initial COVID-19 outbreak. The recovery will be slower and more muted this time, even if the ongoing COVID outbreak is successfully quashed, as less policy support is planned and exporters face a …
Overview – The Gulf economies will be major beneficiaries from higher energy prices and our growth forecasts sit far above the consensus. Outside the Gulf, higher inflation and tighter fiscal policy will weigh on growth, while balance sheet problems are …
25th April 2022
Overview – The war in Ukraine has delivered a shock to Europe just as it was coming out of the pandemic. Higher energy prices will keep inflation elevated, squeeze household incomes and dent business confidence. We think the euro-zone economy will do no …
22nd April 2022
Overview – Economic activity should expand at a strong pace this year but, with the Bank of Canada set to tighten policy rapidly, we expect the quarterly pace of GDP growth to slow below potential in 2023, as residential investment falls from its elevated …
21st April 2022
Overview – The surge in commodity prices will drive stronger regional growth than the consensus expects this year, but not all economies in Latin America will benefit. While Brazil and Colombia will see a terms of trade windfall – we expect GDP growth in …
Overview – The Russian economy will collapse this year and we expect spillovers from the war in Ukraine to cause a recession in many of the smaller countries in the region, particularly Bulgaria and the Baltic States. Loose fiscal policy and strong labour …
20th April 2022
Overview – The surge in global commodity prices will take a little gloss off India’s economic recovery this year but we still expect stronger GDP growth than the consensus. Higher commodity prices will also keep inflation elevated, which we think will …
13th April 2022
Overview – We expect the economy to bend rather than break under the pressure of a rapid monetary tightening by the Fed. We anticipate that real economic growth will remain consistently below its 2% potential pace over the next two-and-a-half years, but …
12th April 2022
Overview – Following a surge last year, rental growth at the national level is set to slow over the next couple of years as demand falls back and affordability constraints bite. (See Focus. ) Alongside a gradual rise in yields, that will bring total …
7th April 2022
Overview – We expect Australia’s GDP to surpass its pre-virus trend as soon as this quarter and to keep expanding at a robust pace thereafter. While wage growth will accelerate only gradually, we expect inflation to surge to 5% by the middle of this year. …
Overview – We expect the best performing office markets over the next five years to be in Southern and Western metros, meaning that almost all the new additions to our forecast this quarter will outperform the six major markets. (See Chart 1.) Houston is …
31st March 2022
Overview – The war in Ukraine will have spillover effects for property in Central and Eastern Europe (CEE), albeit that Russia will be far worst hit. Economic growth is expected to be slower, which will weigh on property demand, while inflation and …
30th March 2022
Overview - We expect Japan’s economic output to return to its pre-virus path by the end of the year. With the recovery from the pandemic complete, we expect GDP growth to slow from 2.7% this year to just 1.0% in 2024. The Bank of Japan won’t respond to …
Overview – Property demand in the Scandinavian and Swiss markets is expected to hold up this year, as they are more insulated from the negative impacts of the war in Ukraine on economic activity. However, structural shifts will continue to cloud the …
24th March 2022
Overview – While the direct impact of the war in Ukraine is likely to be small, we think there will be indirect consequences for euro-zone commercial property markets. Economic growth is expected to be slower, which will weigh on property demand. But as …
18th March 2022
Overview – We expect the robust investment activity seen last year, particularly in H2, to persist into 2022. Although this has competed yields to record lows in the industrial and apartment sectors, we still see further room for yield falls this year in …
15th March 2022
Our forecast that lingering price pressures will prompt the Bank of England to raise interest rates from 0.50% now to a peak of 2.00% next year suggests there is little scope for market interest rate expectations to rise further. Even so, we think that an …
24th February 2022
Although the Fed is poised to step on the brakes to tackle the highest rate of inflation in four decades, we don’t expect the yields of US equities and Treasuries to rise to anywhere near their peaks in 1982 after the central bank jacked up rates. …
18th February 2022
Overview – The worst of the Omicron wave appears to have passed and we expect growth to rebound later this year, albeit weighed down by weak consumer income growth. But persistently high inflation is now set to bring a concerted tightening in Base Rate, …
Recent developments have supported our view that the pandemic will not do much permanent damage to the level of GDP in most countries, especially developed markets. Nonetheless, it will accelerate some of the structural trends that were already set to …
10th February 2022
Overview – It is likely to take longer than most expect for rising interest rates to cool the housing market. Mortgage rates have only just begun to rise from the record low reached in November, and limited supply, high household savings, and the boost to …
4th February 2022
Overview – Energy prices will remain volatile for the next few months, but should fall back later this year as demand drops back and supply picks up. That said, the shortfall of supply over the last year or so means that energy stocks are now extremely …
1st February 2022
Although we expect a further rise in government bond yields to undermine the returns from most “safe” assets, we don’t expect it to be big enough to bring the prices of most “risky” financial assets crashing down. Nonetheless, we think that the returns …
31st January 2022
Overview – Mortgage rates are on the rise, and we expect the 30-year rate will increase to 4.0% by end-2022 and 4.5% by end-2023. While that only takes mortgage rates back to where they were in early 2019, house prices have risen 30% since then. With …
28th January 2022
Although government bond yields have already risen sharply this year, we think that they will continue to increase as central banks press ahead with monetary tightening this year and next. Higher yields will, in our view, weigh further on developed market …
Table of Key Forecasts Overview – Growth across much of the emerging world will be weaker this year than last, with Emerging Europe and China in particular likely to fall short of consensus expectations. The EM monetary tightening cycle will continue, …
Overview – Sub-Saharan Africa’s economic recovery from the pandemic is likely to remain one of the weakest of any region over 2022-23 and our GDP growth forecasts are generally below the consensus. The latest virus waves already seem to be ebbing, but low …
Overview – Soaring energy prices have given a renewed boost to industrial metals prices in recent months but, if we are right, and power costs ease back from April, we think prices will fall sharply later in 2022. After all, demand for metal from key …
27th January 2022
Overview – Supply shortages have directly pushed up the prices of energy commodities and have indirectly raised prices of other commodities by boosting production costs. We think this will remain the case for at least another few months. But as we move …
26th January 2022
The re-tightening of restrictions has overshadowed the start of the year in Switzerland and the Nordics, and our GDP growth forecasts for 2022 are about 0.5%-pts lower than the consensus. Nonetheless, the soft patches for activity should be short …
