Asia Economics Weekly Bank of Korea to play it safe The Bank of Korea (BoK) has raised interest rates by 25bp five times so far this cycle, and further hikes looked nailed on for the central bank’s meeting on Wednesday. But whereas the consensus is... 8th July 2022 · 5 mins read
Latin America Data Response Brazil & Chile Consumer Prices (Jun.) The increases in inflation in Brazil (to 11.9% y/y) and Chile (to 12.5% y/y) last month set the ground for 50bp hikes in policy rates at their respective central banks’ next meetings (in Chile’s case... 8th July 2022 · 2 mins read
Long Run Update Is the low inflation era really over? At the recent ECB’s annual forum, the world’s top central bankers argued that a return to a world of low inflation was unlikely. It is true that sustained undershoots of inflation targets are probably... 8th July 2022 · 3 mins read
Asia Economics Update Pakistan: Further hikes likely as IMF deal nears The State Bank of Pakistan today raised its main policy rate by 125bps (to 15.0%), and made clear that fighting inflation would remain its priority. Given that inflation looks set to rise further in... 7th July 2022 · 3 mins read
Europe Economics Update German wage settlements likely to keep inflation high Very high inflation and low unemployment are driving German unions to seek big pay rises in this year’s collective negotiations. We think nominal pay growth will be in the region of 4-5% this year and... 7th July 2022 · 4 mins read
Latin America Data Response Mexico Consumer Prices (Jun.) The rise in Mexican inflation to 8.0% y/y, its highest rate since 2001, will sustain the hawkish shift seen on the Banxico Board at its latest meeting in June. A 75bp hike in the policy rate in August... 7th July 2022 · 2 mins read
India Economic Outlook More frontloading to come 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... 7th July 2022 · 19 mins read
Middle East & North Africa Data Response Egypt Consumer Prices (Jun.) Egypt’s headline inflation rate slowed for the first time since November to 13.2% y/y in June, but inflation will remain above the upper bound of the Central Bank of Egypt’s target range until late... 7th July 2022 · 3 mins read
Asia Economics Update Sri Lanka: rate hikes not enough to restore stability The central bank in Sri Lanka (CBSL) today raised its benchmark lending facility rate by a further 100bp (to 15.5%), and with inflation running at over 50%, more tightening seems likely. However, rate... 7th July 2022 · 2 mins read
Asia Economics Update Sri Lanka: rate hikes not enough to restore stability The central bank in Sri Lanka (CBSL) today raised its benchmark lending facility rate by a further 100bp (to 15.5%), and with inflation running at over 50%, more tightening seems likely. However, rate... 7th July 2022 · 2 mins read
Australia & New Zealand Economic Outlook Housing downturn raises recession risks 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... 7th July 2022 · 25 mins read
RBNZ Watch RBNZ tightening cycle shows no signs of slowing Rising interest rates have started to weigh on house prices and sentiment. But inflation is probably still rising and the labour market is still tightening. On that basis we expect the RBNZ to hike... 7th July 2022 · 7 mins read
Emerging Markets Economics Update How far are we through the EM tightening cycle? Tightening cycles in Latin America and Emerging Europe are already at an advanced stage. Some 70-80% of the likely rate hikes in their cycles have already been delivered and policymakers will bring... 6th July 2022 · 3 mins read
Europe Chart Pack Inflation pressures remain intense The latest data suggest that underlying inflationary pressures in the euro-zone remain intense. Although core inflation edged down from 3.8% in May to 3.7% in June, this appeared to be down to... 6th July 2022 · 10 mins read
Bank of Canada Watch A more forceful 75 bp hike The recent acceleration in wage growth and rise in long-run inflation expectations leave little doubt that, despite the drop back in commodity prices, the Bank of Canada will follow through with a... 6th July 2022 · 6 mins read
Global Economics Update What rate of wage growth is acceptable for central banks? Even though workers are accepting cuts in their real pay, nominal wage growth is still above “acceptable” rates for central banks in DMs of 3% to 4%. This underlines why interest rates need to head... 5th July 2022 · 3 mins read
