US Economic Outlook Inflation to remain elevated as GDP growth slows We expect underlying inflation to remain well above the 2% target this year, which means the Fed will push ahead with four rate hikes even though real GDP growth is likely to disappoint. Core... 20th January 2022 · 22 mins read
Emerging Europe Economics Update CBRT: rates held in pursuit of “new economic model” Turkey’s central bank (CBRT) followed kept its one-week repo rate on hold at 14.00% today and, even though inflation is likely to breach 40% in the coming months, President Erdogan is unlikely to... 20th January 2022 · 3 mins read
Europe Data Response Euro-zone Final HICP (Dec.) Euro-zone inflation is likely to have peaked at 5% in December, with energy inflation set to fall sharply this year. But we think that core inflation will settle at around 2%, prompting the ECB to... 20th January 2022 · 2 mins read
Global Economics Update What if energy prices keep rising? While ongoing supply shortages have led us to revise up our forecasts for crude oil and wholesale gas prices, we still expect significant falls this year which would reduce headline inflation in major... 20th January 2022 · 4 mins read
Asia Economics Update Central Bank of Sri Lanka’s hike is too little too late The 50bp rate hike made by the Central Bank of Sri Lanka (CBSL) today – after it stood pat for two meetings as foreign currency dried up and inflation soared – is likely to prove too little too late... 20th January 2022 · 3 mins read
Australia & New Zealand Economic Outlook RBNZ will ease even as RBA starts to tighten Australia’s Omicron outbreak will hold back the recovery this quarter, but there are plenty of reasons why Australia will outperform New Zealand over the next couple of years. As the labour market has... 20th January 2022 · 25 mins read
Canada Data Response Consumer Prices (Dec.) Inflation rose to a 30-year high of 4.8% in December but is now close to a peak. We expect it to remain near its current level in the first quarter, before it falls sharply over the remainder of the... 19th January 2022 · 2 mins read
US Fed Watch Will Fed signal that March rate hike is coming? With many Fed officials now either explicitly supporting, or at least “open to”, an interest rate hike in March, we would expect to see some acknowledgement of that in the statement issued after the... 19th January 2022 · 10 mins read
India Economic Outlook On the cusp of policy tightening India’s Omicron wave should only be a temporary setback to the economic recovery. As long as recurrent large waves of COVID are avoided, we think that economic growth will be faster this year than... 19th January 2022 · 18 mins read
Europe Data Response German Inflation (December) Final inflation data for December showed that the decline in Germany’s HICP inflation rate to 5.7% was due to energy and services. We expect both headline and core inflation to fall this year, but... 19th January 2022 · 2 mins read
Africa Data Response South Africa Consumer Prices (Dec.) South Africa’s inflation rate rose to a stronger-than-expected 5.9% y/y in December, probably tilting the Reserve Bank more in favour of continuing to tighten monetary policy. But with soft core price... 19th January 2022 · 2 mins read
UK Economics Consumer Prices (Dec.) After rising from 5.1% in November to 5.4% in December, CPI inflation is now further above the Bank of England’s target than at any point since the UK first adopted an inflation target in October 1992... 19th January 2022 · 3 mins read
Emerging Europe Economics Focus Turkey’s “new economic model” to amplify old problems The “new economic model” adopted by Turkey’s government is likely to mean low real interest rates and a persistently weak lira, but it will come alongside a shift towards capital controls, ever higher... 18th January 2022 · 16 mins read
Nordic & Swiss Chart Pack Riksbank to have to change tack The Riksbank has learnt from its past tendency to project rate hikes that never arrive. But the single repo rate rise by end-2024 that it currently projects is stretching the limits of plausibility in... 17th January 2022 · 5 mins read
UK Economic Outlook More inflation, more interest rate hikes Although the hit to households’ real incomes from a bigger surge in CPI inflation than most expect (to a peak of almost 7% in April) explains why we think GDP growth will be slower this year than the... 17th January 2022 · 27 mins read
Africa Data Response Nigeria Consumer Prices (Dec.) The surprise rise in inflation in Nigeria, to 15.6% y/y in December, will more likely than not prove to be a blip. We don’t think that policymakers will rush to raise interest rates in response. 17th January 2022 · 2 mins read
