The Weekly Briefing from Capital Economics

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.
Trade war: What's behind the Trump administration's latest tariff announcements and why global trade has remained surprisingly resilient.
Shooting war: After oil $100 a barrel again, what are the implications for inflation and central banks if tensions in the Middle East continue to escalate?
AI boom: How AI investment is now the major driver of growth in both the US and China, and what happens if the boom turns to bust? 

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What is the future of US tariffs?
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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 about slowing credit growth and discusses what to expect on the stimulus front.
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The implications of a renewed closure of the Strait
https://www.capitaleconomics.com/publications/global-economics-update/implications-renewed-closure-strait
Global Economic Outlook: US strength points to renewed policy divergence
https://www.capitaleconomics.com/publications/global-economic-outlook/us-strength-points-renewed-policy-divergence-0
UK Drop-In: The Burnham government – will policy ambition collide with economic reality?
https://www.capitaleconomics.com/events/uk-drop-burnham-government-will-policy-ambition-collide-economic-reality
Why Burnham will struggle to revive UK growth
https://www.capitaleconomics.com/publications/uk-economics-focus/why-burnham-will-struggle-revive-uk-growth

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 exclusive excerpt from a recent online client briefing on AI, Chief Economic Adviser Vicky Redwood explains where the technology's impact is already showing up in the data, and what happens to the global economy if AI's promised productivity gains never materialise.
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Capital Economics Key Issues: AI
Drop-In: AI's global shockwaves – Macro and market implications

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 long-standing forecast that gold prices would retreat from their record highs is playing out, and why prices have further to fall from here.
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Drop-In: AI's global shockwaves – Macro and market implications
Asset Allocation Outlook: The AI equity boom reaching its final innings
https://www.capitaleconomics.com/publications/asset-allocation-outlook/ai-equity-boom-reaching-its-final-innings
Commodities Outlook: Beyond Hormuz – the path back to an oil glut
https://www.capitaleconomics.com/publications/commodities-outlook/beyond-hormuz-path-back-oil-glut

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, what do we know about the new government’s plans? Paul Dales and Ruth Gregory from our UK team discuss the fiscal constraints that will limit a Burnham government’s spending ambitions, while explaining why falling inflation could allow the Bank of England to deliver much more monetary easing than markets currently expect.
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UK Economic Outlook: Fall in inflation to 2.0% in 2027 to trigger rate cuts
https://www.capitaleconomics.com/publications/uk-economic-outlook/fall-inflation-20-2027-trigger-rate-cuts
Capital Economics Events
https://www.capitaleconomics.com/events