The Weekly Briefing from Capital Economics

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.
Related content
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
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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 US interest rates, examines mounting trade tensions between Europe and China, and explains why the UK's next prime minister may find fiscal promises difficult to keep.

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 discusses how the outlook could shift if energy starts flowing again, but also explains the economic risks if any deal later falls apart as crude reserves run down.
Related content
Fed on hold as Warsh faces a fractious FOMC
BoE may not follow the central bank crowd in raising rates
BoJ on track to hike despite Ueda’s absence

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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Bar to Fed hikes appears relatively low
Capital Economics events

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 likely to build in the weeks ahead, even as market expectations for central bank responses have tempered in recent days. And they discuss how governments and the energy industry are now scrambling to build alternative supply routes and reduce the Strait of Hormuz’s potency as a geopolitical choke point.