UK Economics Will the MPC still raise interest rates if there’s a recession? It looks as though the economy is halfway towards a recession. Although the Monetary Policy Committee has never raised interest rates during a recession before (the last time it happened was in 1975)... 13th May 2022 · 7 mins read
Global Economics Chart Pack High inflation is hurting real spending Recent data have shown the firmest evidence yet that high inflation is damaging real consumer spending in advanced economies. Real retail sales fell in the US, UK, and euro-zone in March, while... 13th May 2022 · 14 mins read
India Economics Weekly G-SAP redux? The recent jump in bond yields is reportedly causing consternation among policymakers. The big worry is the impact that higher bond yields would have on the trajectory of India’s public debt. This... 13th May 2022 · 4 mins read
Japan Economics Weekly Virus fears waning, Bank of Japan plans could change We doubt that the spike in mobility during Golden Week is a harbinger of a rapid rebound in consumer spending. Mounting concerns about rising living costs and lingering virus fears among the elderly... 13th May 2022 · 7 mins read
FX Markets Focus We expect the dollar to stay strong as the Fed tightens The trade-weighted US dollar has edged up to multi-decade highs as the Fed has started to raise its policy rate. In this Focus, we analyse past Fed tightening cycles and explain why we think the... 12th May 2022 · 12 mins read
Latin America Economics Update Brazil’s tightening cycle not derailing credit growth Brazil’s central bank has undertaken the most aggressive tightening cycle of any major economy over the past year, but there has been surprisingly little impact on bank lending. And while we do expect... 12th May 2022 · 4 mins read
Africa Economics Update A primer on South Africa’s monetary policy reform The South African Reserve Bank is set to shake up its monetary policy setup. This Update provides some clarity on what policymakers will do and why, and what it means for monetary and credit... 11th May 2022 · 6 mins read
Asia Economics Update Bank Negara Malaysia will go slow following early hike Bank Negara Malaysia (BNM) raised its main policy rate earlier than many had expected today, but given low inflation and a continued need to support the recovery, we still think that the tightening... 11th May 2022 · 3 mins read
UK Economics Weaker economy yet to dent price expectations The weaker economic outlook triggered by the surge in CPI inflation to a 30-year high of 7.0% in March has yet to put a dent in businesses own expectations for their selling prices. The Bank of... 10th May 2022 · 9 mins read
US Economics Focus What to expect from QT We expect the Fed to reduce its asset holdings by more than $3trn over the next couple of years, enough to bring the balance sheet back in line with its pre-pandemic level as a share of GDP. That... 10th May 2022 · 12 mins read
Canada Economics Focus Will a housing downturn crash the economy? We expect higher interest rates to cause a 10% fall in house prices over the next 12 months and an even steeper fall in residential investment. With the rest of the economy still recovering from the... 9th May 2022 · 12 mins read
Australia & New Zealand Economics Update Australia - Falling real incomes won’t derail consumption for now The sharpest fall in real incomes since the 1990/91 recession won’t prevent a strong rebound in consumption this year and next. But with the tailwind from reopening the economy set to fade... 9th May 2022 · 2 mins read
Capital Daily Three market trends as payrolls clear the Fed to press ahead We expect three of the major trends in markets this week – higher long-dated US Treasury yields, a stronger US dollar, and faltering equity markets – to continue for a while yet. 6th May 2022 · 7 mins read
Latin America Economics Weekly Inflation alarm bells, Amlo seeks price freeze The rise in inflation to multi-decade highs across much of the region in April is clearly worrying policymakers and, this week, Mexico’s government became the latest to announce measures to cushion... 6th May 2022 · 7 mins read
US Economics Weekly Fed hikes as acute shortages drive up costs The latest weakness in equities isn't going to stop the Fed from continuing to hike its policy rate by 50bp in June and July, not when labour market conditions remain unusually tight and, in an... 6th May 2022 · 6 mins read
UK Economics Weakening economy won’t do the MPC’s job The Bank of England’s prediction that the economy is on the brink of recession grabbed the headlines this week, but we suspect its GDP forecast will prove too downbeat. That’s not to say the risk of... 6th May 2022 · 7 mins read
