The Weekly Briefing from Capital Economics

Next week could be a pivotal one for the global economy, with interest-rate decisions from the Fed and ECB alongside a challenging UK Budget.

In this episode of The Weekly Briefing, Chief UK Economist Paul Dales is joined by Chief Global Economist Jennifer McKeown to explain what to expect and where the biggest risks lie. They discuss why the Fed is likely to pause next week but resume raising rates from December, and what to listen for from Fed Chair Kevin Warsh as inflation pressures remain uncomfortably strong.

They also explain why the ECB...

China's economy is slowing, but not collapsing. Domestic demand remains weak, the property downturn continues to weigh on growth, and deflationary pressures persist. Yet exports remain remarkably strong, helping to drive a growing trade surplus and raising questions about how long the rest of the world will tolerate China's expanding global footprint.

In this week's Capital Economics Weekly Briefing, Neil Shearing is joined by Julian Evans-Pritchard, Head of China Economics at Capital Economics, and Erik Britton, CEO and Chief Economist at Fathom Consulting. They discuss Capital Economics' central outlook for China and introduce the new China...

This week, Neil Shearing is joined by James Reilly and Jack Allen-Reynolds to unpack the latest bond market sell-off, the forces driving higher global yields, and why equity markets continue to defy expectations. They also examine mounting fiscal concerns in France, assess whether the eurozone faces a renewed debt crisis, and discuss how Europe is responding to growing competitive pressures from China.

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The global economy is facing another energy shock, yet growth has remained remarkably resilient. In this week's Capital Economics Weekly Briefing, Neil Shearing is joined by Jennifer McKeown and Mark Williams to discuss why households, governments and the AI investment boom have helped cushion the blow, and why markets may be overestimating how much further central banks will tighten policy.

The team also explores the implications of China Shock 2.0. With China's exports surging even as domestic demand remains weak, they examine how Beijing's industrial strategy is reshaping global trade, who stands to benefit, and which economies are...

What did President Xi Jinping’s summit with Donald Trump tell us about the future of US-China relations? Has the latest trade truce brought the two sides any closer to resolving their differences? And with China’s exports booming despite weak domestic demand, can the economy continue to hold up?

Chief Global Economist Jennifer McKeown and Head of China Economics Julian Evans-Pritchard join us on the latest episode of The Weekly Briefing to discuss the Xi-Trump summit, tariffs, rare earths, AI and Taiwan, as well as the outlook for China’s economy.

Also on the show...

Neil Shearing and Jennifer McKeown unpack a pivotal week for the world's major central banks. They discuss the Federal Reserve's latest rate hike and what it says about the independence of central banks in an era of political pressure. They then talk about why the market may be mispricing the future path of interest rates in the US, euro-zone, Japan and the UK. Finally, they discuss Capital Economics' new China Shock 2.0 research programme, exploring how China's export surge is reshaping the global economy and creating challenges and opportunities for Europe, Asia and beyond.
Find out more about our...

The stunning surge in Chinese exports bears comparison with what happened during the first China shock of the early 2000s. But this time is different: the scale is much larger, the goods being exported are much more advanced and the geopolitical environment is much more fraught.

In this special episode of The Weekly Briefing, Group – Chief Economist Neil Shearing introduces Capital Economics' new series on China Shock 2.0, explaining what this shock means for the global economy, why the costs this time are falling hardest on Europe and why an orderly adjustment to global imbalances lo...

That was a much hotter payrolls report than the market had expected, but how will it influence this month’s Fed decision? With inflation risks still prevalent, how will the ECB and Bank of England approach their September meetings? And what does the surge in bond yields mean for economies?

Group Chief Economist Neil Shearing and Chief North America Economist Stephen Brown join David Wilder on the latest episode of The Weekly Briefing to discuss energy prices, bond yields, inflation risks and what they mean for the path of interest rates.

Also on the sh...

Can another set of blow-out AI earnings reignite the rally that has powered equities for so long but recently seems to have run out of puff?

Chief Markets Economist Jonas Goltermann joins The Weekly Briefing from Capital Economics to discuss the latest tech earnings, whether Scott Bessent has managed to cap Treasury yields and what investors will want to hear from Kevin Warsh in his Jackson Hole address.

Also on the show, just days after Bessent announced ‘Economic D-Day’ for Iran, Chief Emerging Markets Economist William Jackson assesses how much pain the Iranian econ...

This special episode of The Weekly Briefing from Capital Economics features an exclusive extract from our client briefing on the global bond sell-off, its causes, consequences and where markets go from here. 

In this edited extract, Group Chief Economist Neil Shearing and Chief Markets Economist Jonas Goltermann answer questions from clients around the world, including:

Have a couple of softer US inflation prints taken a post-Summer Fed rate hike off the table? Did that CPI and PPI data vindicate Kevin Warsh’s divisive approach to central bank communications? And what does the death of former Premier Zhu Rongji tell us about China’s political economy today?

Group Chief Economist Neil Shearing joins David Wilder to discuss the US inflation and rate outlook, the angst at the long end of the Treasury yield curve, and why the pace and nature of reform in China today not only pales in comparison what was happ...

A jam-packed episode begins with Group Chief Economist Neil Shearing joining David Wilder to discuss what a surprisingly weak US employment report means for expectations that the Federal Reserve will cut interest rates in September.

Neil and David are then joined by Chief Markets Economist Jonas Goltermann to unpack the implications of coordinated US-Japanese intervention to halt the yen's slide. They discuss everything from Prime Minister Takaichi's policy agenda and its impact on market perceptions of the currency to whether Scott Bessent's move was also intended to send a message to Beijing about an undervalued renminbi.<...

Kevin Warsh sent financial markets into turmoil with a press conference that muddied, rather than clarified, the Fed's message. But was the confusion all part of a broader strategy from a Federal Reserve chair who takes a dim view of forward guidance? On the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing joins David Wilder to discuss why he doesn't think the new chair deserves the benefit of the doubt, and why clearer communication will be essential if the Fed is to preserve its inflation-fighting credibility.

Also on the show...

Group Chief Economist Neil Shearing unpacks another turbulent week for the global economy. He talks to David Wilder about the latest escalation in the US trade war, the economic fallout from rising tensions with Iran and higher oil prices and why the AI investment boom continues to reshape growth in the US and China.

The collapse of the US-Iran ceasefire has triggered another spike in oil prices and put markets back on edge. Neil Shearing joins David Wilder to discuss whether the world is heading for another oil shock and what it would mean for growth and inflation. He also explains how Kevin Warsh's warning that the Fed has "no tolerance for persistently elevated inflation" could translate into policy.

Also on the show, Julian Evans-Pritchard unpacks China's disappointing Q2 GDP figures, including the role AI is playing in shoring up activity, explains why the People's Bank of China isn't more concerned...

It's far too soon to be worrying about another spike in inflation from renewed fighting in the Middle East. That's one of the key messages from Capital Economics' Global Chief Economist Jennifer McKeown, who joins David Wilder on The Weekly Briefing with Neil Shearing away this week.

Jenny explains what could drive the Fed to raise interest rates as early as September, whether economies on both sides of the Atlantic can continue to hold up and where we think the consensus is wrong on the outlook for interest rates.

Also on the show, in an...

For the past three years, our Markets team has been more optimistic than most about the AI-driven rally in global equities. That view has been borne out by events. Now they believe the rally has entered its final phase and that a sharp downturn will follow.  On this week's The Weekly Briefing, Chief Markets Economist Jonas Goltermann explains why we think the correction is coming in 2027, what to expect before the plunge and whether the Fed will play a role in the rally's demise. 

Also on the show, Climate and Commodities Economist Hamad Hussain discusses why our lo...

Our flagship Global Economic Outlook is just around the corner, and in this latest episode of The Weekly Briefing, Group Chief Economist Neil Shearing previews our view of a world in which some economies are benefiting from the AI investment boom while others are falling behind. He also discusses what to expect from next week’s US employment report and why markets are underestimating just how hawkish the Fed may need to remain to bring inflation back to target.

Also on the show, with Andy Burnham’s 'coronation' as the UK’s next prime minister looking increasingly likely...

A peace deal that's already showing signs of strain. Central bankers still wrestling with inflation. A new Fed chair seeking reform. And a UK local election with implications for the bond market.

It’s been a busy week for macro and markets, and Group Chief Economist Neil Shearing joins David Wilder to make sense of it all. Neil explains what the increasingly fragile US-Iran peace deal means for global oil supplies and the outlook for inflation and interest rates.  

In his discussion, Neil reviews Kevin Warsh's first meeting as Fed chair, considers the outlook for...

Relatively strong US growth, sticky inflation and a resilient labour market have strengthened the case for further Fed tightening. In this week's episode of The Weekly Briefing, Chief North America Economist Stephen Brown tells David Wilder why rates may rise again before year-end and what to expect from Kevin Warsh's first meeting as Fed Chair.

Before that, it's Groundhog Friday, as Donald Trump again talks up an imminent deal to reopen the Strait of Hormuz. But what if this time it really is for real and a US-Iran deal does get done? Group Chief Economist Neil Shearing...

Are we moving towards Fed rate hikes? Even before the release of a strong May US employment report, Group Chief Economist Neil Shearing joined The Weekly Briefing to explain why shifting dynamics on the FOMC mean the Federal Reserve could emerge from the summer weighing the need for tighter policy to contain inflation.

Plus, after another extraordinary surge in AI stocks, Chief Economic Adviser for Financial Markets John Higgins discusses how much further the rally could run, whether current earnings growth is sustainable and what could ultimately burst the stock market bubble.

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This could prove another false dawn, or the US and Iran could finally reach an agreement to reopen the Strait of Hormuz to oil and gas shipments. But even if the strait reopens, energy flows, oil prices and, by extension, inflation won’t snap back quickly to pre-war levels.

Group Chief Economist Neil Shearing and Chief Climate & Commodities Economist David Oxley join the latest episode of The Weekly Briefing to discuss the new normal for global energy markets and what it means for the world economy.

They explain why inflation pressures are still li...

This latest wobble in the bond market almost certainly won’t be the last. Group Chief Economist Neil Shearing and Chief Markets Economist Jonas Goltermann join David Wilder on the latest episode of the Weekly Briefing to discuss the forces that have driven bond yields to multi-year highs. 

They examine shifting perceptions around inflation as the closure of the Strait of Hormuz drags on, the fiscal worries gnawing away at investor sentiment across the advanced economies and we're entering a world where inflation settles structurally higher than the 2% era policymakers once took for granted. And with Japan’s yie...

Westminster is gripped by the game of thrones around Labour's slow-mo leadership drama, which could deliver the UK's seventh prime minister in ten years. But for markets and the economy, the stakes are very real. Chief UK Economist Paul Dales tells David Wilder why. 

He says all the leading contenders to replace Starmer would, to varying degrees, open the spending taps but also explains why the bond market is likely to push back hard. Paul also makes the case for the UK's medium-term outlook looking brighter than many assume, though not because of who's in charge of t...

Donald Trump travels to Beijing next week for a long-awaited summit with Xi Jinping that carries huge geopolitical significance, but one where investors should keep expectations firmly in check.

Group Chief Economist Neil Shearing and Head of China Economics Julian Evans-Pritchard join David Wilder to assess the state of the US-China relationship and why any apparent thaw in tensions may prove superficial. They discuss issues including:

A day after Brent crude surged above $120 per barrel, Group Chief Economist Neil Shearing and Deputy Chief Emerging Markets Economist Jason Tuvey discuss how long the conflict in the Middle East could continue and why Iran’s collapsing economy is not a reliable guide to when the regime might capitulate.

Speaking with David Wilder, they also explore how central bankers are navigating the inflation risks posed by a prolonged disruption to energy supply, as well as what the UAE’s departure from OPEC could mean for oil markets and what it signals in a world of intensifying US–C...

The Iran conflict is approaching its third month, the Strait of Hormuz remains closed and oil is back above $100 per barrel. How safe is the assumption that this will all be resolved soon, and what happens to commodity prices, growth and inflation if it isn’t?

In the latest episode of The Weekly Briefing, Chief Global Economist Jennifer McKeown and Chief Climate & Commodities Economist David Oxley join David Wilder to unpack the macro and market assumptions behind our ‘adverse’ conflict scenario. They discuss how far commodity prices could rise and whether that risks tipping the global econom...

Global imbalances are back. But how serious is the threat this time, and could they trigger the next phase of global economic instability? Group Chief Economist Neil Shearing joins David Wilder to unpack what is driving balance of payments positions to worrying extremes, why a more fragmented and volatile world raises the stakes, and why Donald Trump and Xi Jinping are unlikely to take meaningful steps to address these tensions when they meet next month.

Also on the show, Deputy Chief EM Economist Jason Tuvey examines the economic shock hitting Gulf economies as a result of the...

The latest Weekly Briefing covers the global outlook, financial markets and energy. Group Chief Economist Neil Shearing explains what the ceasefire in the Middle East means for growth and inflation, how quickly the world economy could recover if it holds, and what happens if fighting resumes.

James Reilly, a Senior Economist on our Markets team, joins to run through updated forecasts for equities and bonds, why markets have held up relatively well, and why the stock market highs expected before the war now look out of reach.

Plus, in an exclusive clip from a recent...

The AI hype cycle shows no sign of slowing. But how much are the hundreds of billions in investment actually boosting economies, and when will that spending translate into meaningful productivity gains?

In this episode, Senior Economic Adviser Vicky Redwood discusses her new report, 'How deeply is AI taking hold in the economy?', the latest addition to Capital Economics’ analysis of AI’s global impact. In conversation with David Wilder, she separates hype from reality, covering:

Our updated macro and market forecasts assess the impact on growth and inflation – and the likely central bank response – under both baseline and adverse scenarios for the Middle East conflict. In the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing discusses why the more benign scenario would deliver a negative but manageable shock to the global economy, while a more adverse outcome could tip it into outright recession.

Also on the show, Deputy Chief UK Economist Ruth Gregory explains why gilts have been the hardest hit among G10 government bonds as tens...

Pity the poor central banker. As energy prices surge, they are grappling with the trade-off between growth and inflation, while trying to communicate this all to markets without triggering an unwanted tightening in financial conditions.

At the end of an unusually busy week for policy meetings, Group Chief Economist Neil Shearing and Chief Global Economist Jennifer McKeown assess how central banks are managing this difficult task, and whether investors are right to position for rate hikes from some banks that only a few weeks ago were expected to ease policy this year.

In the...

News of a record release of emergency oil reserves has quickly been overshadowed by images of tankers on fire in the Strait of Hormuz. Thirteen days into the conflict, tensions in the Middle East appear to be escalating rather than easing. What is the view from commodity and financial markets, and what could this mean for the global economy?

Capital Economics has modelled three scenarios to assess how oil and gas supplies and prices could evolve as the conflict unfolds, and what this might mean for global growth, inflation, central bank policy and financial markets.

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Conflict in the Middle East, a surge in oil and gas prices, and a surprise drop in US payrolls – it’s been a turbulent week for the global economy.

In the latest episode of The Weekly Briefing, Capital Economics Group Chief Economist Neil Shearing joins David Wilder to discuss what the spreading Middle East conflict and sharp spike in energy prices mean for global growth and inflation, and why the latest US jobs report may not signal a major slowdown.

Later, Senior Climate and Commodities Economist Kieran Tompkins explains the scale of disruption in global oil...

Amid widening conflict in the Middle East, our economist team held an online briefing first thing Monday to tackle some of the key questions that clients have been asking. In this edited clip from that briefing, you’ll hear the team tackle issues, including:

Is China’s latest Five-Year Plan about to reset its economic model and tackle the imbalances weighing on both the domestic and global economy?

Speculation always builds ahead of a new Five-Year Plan. But this time, the stakes feel higher. With growth slowing, debt risks lingering and external tensions elevated, could this Plan mark a genuine turning point?

That is what Julian Evans-Pritchard will be watching for as the National People’s Congress opens in Beijing on Thursday. On The Weekly Briefing, he joins Group Chief Economist Neil Shearing to talk to Davi...

The Supreme Court has finally ruled on Donald Trump's tariffs with an opinion that the president has no right to impose tariffs under the International Emergency Economic Powers Act. So what happens now?

Deputy Chief North America Economist Stephen Brown and Deputy Chief Markets Economist Jonas Goltermann join The Weekly Briefing from Capital Economics to discuss the implications of this legal ruling for the US economy, for Federal Reserve policy and for financial markets. In their conversation with David Wilder, Stephen and Jonas address key issues, including:

From the lows of December retail sales to the highs of January payrolls, recent US data has sent mixed signals. But the economy remains in relatively good shape, argues Deputy Chief North America Economist Stephen Brown on the latest episode of the Capital Economics Weekly Briefing. He explores why the idea of a “K-shaped” economy may be overstated, what markets are missing about the productivity growth upturn, and the chances of much lower rates from a Kevin Warsh-led Fed. 

Also on the show, as Keir Starmer’s government reels from one of its toughest weeks yet, Deputy Chief U...

In this week’s episode, Neil Shearing talks to Vicky Redwood and John Higgins about a tumultuous week in equity markets, how AI is creating winners and losers, and whether there’s any evidence that AI is starting to lift productivity growth in economies.

AI already making a big contribution to productivity growth
China’s AI rollout could rival the US

This weekend’s Japanese election is shaping up to be one of the most consequential in years. As Sanae Takaichi, newly installed leader of the ruling Liberal Democratic Party, seeks to cement her mandate, government bond yields and the yen have been moving in opposite directions amid headlines warning of plans to open the fiscal floodgates.

But are markets really responding to fears of runaway spending, or to the reality that Japan is finally emerging from decades of deflation? 

Capital Economics’ Head of Asia-Pacific, Marcel Thieliant, and Head of Asia-Pacific Markets, Thomas Mathews, join the show...