The Weekly Briefing from Capital Economics

Can you pitch yourself as a responsible global stakeholder at the same time as running a $1.2 trillion trade surplus? That’s China’s big global macro play, and it’s one that Neil Shearing thinks China is going to struggle to pull off. The Group Chief Economist of Capital Economics is on The Weekly Briefing to explain what that mammoth trade imbalance means for advanced and emerging economies in a fracturing global economy, including why some EMs are doing quite well as a result of all of the geoeconomic ructions.Also on the show, there’s an awful lot of noise around the race for AI leadership between the US and China, but how to separate out the hype from the reality? China Economist Leah Fahy’s new report sizes up the progress that Chinese AI has made since the launch of DeepSeek a year ago, and the impact that Beijing’s race for tech supremacy will have on the country’s economic outlook.Six non-consensus calls for China for 2026China’s AI rollout could rival the USDrop-In: The shape of the fractured world in 2026The economic and market impact of AI

The first trading week of 2026 has been a whirlwind of geopolitical shocks and big economic developments. Group Chief Economist Neil Shearing is back on The Weekly Briefing to break down an historic start to the year, including:The Maduro capture: Neil provides much-needed macro and market context behind the news of Nicolás Maduro’s capture in Venezuela.AI and US productivity impacts: Whether the "stunning" Q3 US productivity numbers suggest massive AI investments are moving the needle for the US economy – and whether other economies will soon start feeling the benefit.The labour market and the Fed: A review of the December payrolls report and what it could mean for the Fed.Also on the show: David Oxley and Kieran Tompkins from our Commodities team join us to make sense of a volatile week in the oil market. They discuss the reality behind expectations for a surge in Venezuelan oil flows onto the global market.

This recovery in commercial real estate is unique. Across the US, Europe, and Asia, it has been defined by persistent weakness in both investment and prices. On this special episode of The Weekly Briefing, Chief Real Estate Economist Kiran Raichura and Senior Real Estate Economist Amy Wood join David Wilder to discuss whether this weakness will persist through 2026 and where investors can still find outperformance. Kiran and Amy address:Why higher-for-longer interest rates remain the primary determinant of returns for most clients.What is required to bridge the gap between seller and buyer price expectations.Which traditional sectors offer the best returns, and which alternatives will provide significant outperformance.Why private credit markets represent the greatest downside risk to commercial real estate in 2026.Further reading:Key themes for global commercial real estate in 2026Global Commercial Property Chartpack (Q4 2025)

The final major week of the year in macro is in the books. Group Chief Economist Neil Shearing joins The Weekly Briefing to explain why the latest US inflation report should be taken with a “bucketful of salt,” while reviewing the year-end moves from the BoE, BoJ, and ECB. He reviews the latest moves from the Bank of England, the Bank of Japan, and the ECB, and talks about why a growing Chinese trade surplus has a corresponding deficit that could present a key risk to global macro stability.Plus, Deputy Chief Markets Economist Jonas Goltermann discusses one of our most prominent calls for 2026: why, despite recent wobbles, the AI-driven equities bubble will continue to inflate.

In this special episode of The Weekly Briefing podcast, Group Chief Economist Neil Shearing and Chief Global Economist Jennifer McKeown outline Capital Economics' expectations for 2026.They tackle the key drivers and risks in the year ahead, examining how the AI narrative will unfold, why the US will be a notable outperformer, how much further China’s exporters can take market share and why a new Fed chair probably won’t deliver the rate cuts that Donald Trump wants.Learn more: The World in 2026 homepage

The year began amid optimism that Europe was finally prepared to meet its economic potential. But as the end of 2025 approaches, how much has actually changed in the European story of weak growth and political fragmentation? In this special episode of The Weekly Briefing from Capital Economics, Chief Europe Economist Andrew Kenningham and Group Chief Economist Neil Shearing join David Wilder to what has – and hasn’t – changed in the European outlook.They explore Europe’s challenges in navigating an increasingly fractured global economy, including whether its industries are equipped to handle competitive pressures from the US and China, the risks stemming from elevated public debt, and why the urgency to ramp up defence spending isn’t being met by action.Plus, in a clip from a recent client briefing, EM economists Liam Peach and William Jackson provide an update on the war in Ukraine and the latest White House efforts to broker a ceasefire.Analysis and events referenced in this episodeDrop-In: The World in 2026 - The global macro and market outlookSpotlight: The future of EuropeRead: ECB interest rates cuts doing little to boost growthWatch: China and Russia – The limits of the “no limits” partnershipRead: Russia & China: a “no limits” partnership with limits

After all the kite-flying, the doom-laden briefings and the policy U-turns, the UK Budget landed well with the markets. But did gilts rally simply because the news wasn’t worse, or has the government genuinely won over the bond vigilantes?  And for all the initial success in launching this Budget, where is the strategy that will lift the UK’s anaemic growth? Chief UK Economist Paul Dales and Deputy Chief UK Economist Ruth Gregory join David Wilder to assess the Budget’s impact, the economic fallout and why lingering political uncertainty still points to more bond-market volatility in 2026.Plus, Chinese fixed-asset investment is falling, prompting debate among China watchers about whether it's a sign the crackdown on price wars and overcapacity is biting. But China Economist Leah Fahy explains why there could be less to investment's weakness than the success of Beijing’s policies – and the latest reading of our China Activity Proxy helps show why. Analysis and events referenced in this episodeWatch: The Autumn Budget – What’s next for the economy and markets?Register: Autumn Budget – What does it mean for the property outlook?Read: Autumn Budget - Markets give the smaller-than-expected Budget the thumbs upExplore: The economic and market impact of AIRead: CAP: Growth slows, but industry still going strong

Is the bubble bursting? Despite a big earnings beat from Nvidia, concerns about overheated AI valuations are mounting. Jonas Goltermann weighs the risks that the equities rally is fading. We also look at what to expect from Rachel Reeves’ Budget after an unusually turbulent build-up, and the possible economic fallout. And Neil Shearing considers what this week’s Trump-Mohammed bin Salman meeting signals about Saudi Arabia’s position in a fracturing global economy.Analysis and events referenced in this episode:UK Drop-In: The Autumn Budget – What’s next for the economy and markets?What if the AI stock market boom turned to bust?Why we aren’t worried about US tech valuationsMbS’s Washington trip tips the balance in US’s favour

Where is the big macro payoff from the surge in artificial intelligence investment? And is AI wiping out entry-level jobs? The latest episode of The Weekly Briefing from Capital Economics unpacks these questions and examines what this new wave of technology really means for growth and labour markets.The episode also marks the reopening of the US government with a clear assessment of the economic outlook, and explores how fiscal risks are disrupting politics across the US and Europe. These pressures are set to shape policy debates well into 2026.Analysis and events referenced in this episodeRead: How to think about AI investmentRead: Has the AI “jobpocalypse” begun?Read: China summer investment slump likely to be short-livedWatch: EM Drop-In: India at the geo-economic crossroadsCapital Economics events

Who was Rachel Reeves really speaking to when she hinted at higher taxes this week? How much of a threat is the Supreme Court to Treasury tariff revenues? And how useful is “G2” as a lens for the new global order? Group Chief Economist Neil Shearing unpacks these big global macro questions in the latest episode of The Weekly Briefing from Capital Economics. Also on the show, Chief Markets Economist John Higgins assesses whether this week’s sell-off marks the end of the great AI-driven US equity boom, or was just a wobble on the way to new highs.Analysis and events referenced in this episodeRead: UK Autumn Budget 2025 PreviewRead: How could the Budget influence UK housing?Drop-In: India at the geo-economic crossroadsDrop-In: Commercial Property Outlook - What to watch out for in 2026Read: Reliance on tech is a double-edged swordRead: What to make of the mixed reaction to this week’s big-tech results

The Fed is trying to calibrate policy in the midst of a government shutdown that’s effectively cut off the flow of data. Jerome Powell says that when you’re driving in fog, you should slow down – but there’s still a case for the FOMC to follow this past week’s rate cut with another move in December, says Deputy Chief North America Economist Stephen Brown. He talks to David Wilder about why the state of the US economy argues for another cut this year, but fewer in 2026 than markets currently expect.That Fed meeting wasn’t the week’s only big event. In Korea, Donald Trump held the first face-to-face meeting of his second term with Xi Jinping. The one-year truce resulting from that meeting has eased near-term US-China trade tensions, but much could still go wrong, warns China Economist Leah Fahy. She discusses what might plunge bilateral relations back into crisis, the health of China’s economy, and why – even if Washington clears Chinese firms to buy cutting-edge AI chips – they may not do so.Analysis and events referenced in this episode:Drop-In: The Fed, ECB and Bank of England – Latest decisions and policy outlookCapital Economics EventsRead: Fed cuts and ends QT, but further loosening not guaranteedRead: Bank of Canada cuts but thinks it has done enoughXi-Trump talks buy China time to decouple at its own paceThe economic and market impact of AI

Out of the darkness of a shuttered US government comes a rare data release – and it’s a CPI report that’s given markets some relief as the week draws to a close. But does September’s inflation data really clear the way for Fed rate cuts in December as well as October, as investors now expect?In this week’s episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing explains why the Fed is likely to stay cautious, previews key upcoming central bank meetings, and looks ahead to next week’s much-anticipated Donald Trump-Xi Jinping summit in South Korea.Also on the show, the US Treasury’s new sanctions on Russia’s two biggest oil exporters have brought a key risk to our below-consensus oil price forecasts to the fore. Chief Climate and Commodities Economist David Oxley discusses how much this move could shake up the outlook – and whether Trump will actually follow through with full enforcement.Analysis and events referenced in this episode:Read: China ramping up use of export controlsDrop-In: Argentina’s mid-term elections – A referendum on Milei’s reformsDrop-In: The Fed, ECB and Bank of England – Latest decisions and policy outlook

In just a few days, US–China relations have taken a troubling turn. How did we go from the goodwill of the London and Madrid bilaterals to the current war of words, the threats and the counter-threats? Is this simply pre-APEC brinkmanship, or the start of a more fundamental breakdown in relations between Washington and Beijing? And how great are the risks of a miscalculation that spills over into the global economy? In this special episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing and Head of China Economics Julian Evans-Pritchard discuss the past, present and future of US–China relations. They explore key questions, including:• What’s driving Beijing’s new controls on rare earths, and whether the government could reverse course• What’s wrong with US perceptions of China’s economic health – and why those perceptions could prove dangerous • How the global economy will need to keep adjusting to a fracturing US-China relationshipAnalysis referenced in this episodeThe fracturing of the Global EconomyUS may revive plans to curb financial ties with ChinaGlobal Economics Outlook: US leads, others lag, in uneven global economyCAP: Economy holding up, but growth remains weakChina’s push for innovation is not lifting productivity

How reliant is the US economy on the AI investment boom? It’s a question Group Chief Economist Neil Shearing keeps getting in client meetings. On this episode of The Weekly Briefing, he tells David Wilder why there’s more to the story than hype around a new technology. Neil also explains why France faces a political – but not an economic – crisis, and what to make of China’s toughest moves yet to control rare earth exports.Also on the show, six months after Liberation Day, Deputy Chief Markets Economist Jonas Goltermann assesses how predictions of the dollar’s demise have played out and unpacks the market’s striking response to Japan’s new LDP leader.Analysis and events referenced in this episode:Watch: US Outlook – Weighing the AI boom, labour constraints and the Fed’s next chapterRead: China tightens its grip on rare earths (again)Register: Markets Drop-In: Asset Allocation in 2026 – Why we don’t think the AI equities boom is overRead: Japan coalition talksRead: What would PM Takaichi mean for Japan?

Our new Global Economic Outlook has just been published – and it makes for a striking contrast. In the US, the drag from Trump’s policy agenda looks set to be outweighed by an AI-driven investment boom that may already be lifting productivity. In Europe, by contrast, the optimism seen earlier this year has faded as structural headwinds continue to hold growth back.In this episode of The Weekly Briefing, Group Chief Economist Neil Shearing explores how AI may be transforming America’s potential, even as Europe struggles with long-standing weaknesses.Plus, a decade on from a devastating market crash, Asia-Pacific Markets head Thomas Mathews unpacks what’s been driving China’s equity boom this year – despite the broader economic weakness – and how sustainable it really is.Analysis and events referenced in this episodeGlobal Economic Outlook: US leads, others lag, in uneven global economyDrop-In: US Outlook – Weighing the AI boom, labour constraints and the Fed’s next chapterDrop-In: China Outlook – Can policy reverse economic weakness?The economic and market impact of AIMore upside for China’s stock market as its AI+ plan gets going

Tariffs are back in the headlines after Donald Trump’s latest announcements – but how much of a threat do these new levies really pose? Could they fuel inflation pressures, and is Trump’s trade policy really bringing manufacturing jobs back?Neil Shearing joins David Wilder to assess Trump’s tariff threats, explain why Stephen Miran’s call for US rates to be halved doesn’t add up, and examine what’s driving the divergence between inflation in the US and Europe/UK.Also on the show, Latin America Economist Kimberley Sperrfechter looks at an extraordinary week in Argentina, where markets have steadied after Washington intervened. What drove the Trump administration to act so forcefully, and will the support work?Analysis and events referenced in this episode:Data: Tariff Impact ModelRead: US Tariff AnnouncementRead: Japanese manufacturers starting to shift production to USRead: Euro-zone inflation risks now to the downsideDrop-In: From bonds to equities – The great pensions switch and its risksDrop-In: Where is r* heading? Catching up on equilibrium real ratesDrop-In: UK Outlook – More tax rises to add to economy’s woes​​Read: Mapping China’s presence in Latin America​

There’s plenty of talk about a possible settlement in US-China relations, but Group Chief Economist Neil Shearing urges caution. Ahead of a call between Donald Trump and Xi Jinping, he spoke with David Wilder about how a deal might be struck – and why it would fall short of easing the deeper tensions driving the fracturing of the global economy.Also on the show, with crime rising in Latin American countries once seen as relatively safe, Chief Emerging Markets Economist William Jackson discusses its economic costs and influence on upcoming elections.Plus, in an exclusive clip from our central bank Drop-In briefing, we look at how the Fed’s latest rate projections compare with ours, and why the Bank of England is growing more sensitive to inflation risks.Analysis and events referenced in this episode:Event: Fracturing in the Age of Trump - New York October 2025Read: China's Nvidia ban signals strong push for chip self-sufficiencyRead: Counting the cost of crime in Latin AmericaLatAm Outlook: Slowdown sets the stage for dovish surprisesWatch: Central Bank Drop-In - Unpacking the Fed, ECB and Bank of England September meetings

The Fed meets this coming week to decide how much monetary relief the US economy really needs. Group Chief Economist Neil Shearing says that, employment data aside, the evidence argues for fewer rate cuts than markets are pricing in. He talks to David Wilder about the health of the economy, whether the surge in AI investment is making a difference, and previews the Bank of England meeting, where the pace of quantitative tightening may be slowed by a still-febrile bond market. Also on the show, Chief Climate and Commodities Economist David Oxley assesses the oil price outlook in light of the week's geopolitical developments in Qatar and Poland, and ahead of OPEC’s 65th anniversary.Analysis and events referenced in this episodeUS economy is doing better than weak payrolls suggestNo more BoE cuts this year, but rates to fall to 3.00% next yearLabour market slump to prompt BoC to resume cutsWeak labour demand forces Fed off the sidelinesThe economic and market impact of AIData: GDP NowcastsOPEC at 65: shifting market dynamics expose frailties

Group Chief Economist Neil Shearing tackles that weak US August Employment report, previews the coming week’s inflation data, talks about what’s been happening in the bond market and explains just what recent get-togethers in China signal about a new world order.Also on the show, ahead of a crunch vote for France’s government, Chief Europe Economist Andrew Kenningham talks about why the French political establishment is struggling to break out of its fiscal logjam, and what this all means for the outlook for the government bond market. Analysis and events referenced in this episode:Read: French borrowing costs may soon exceed Italy’sDrop-In: France’s political turmoil and the fragility of global bond marketsDrop-In: What’s really holding up the commercial real estate recovery?Fracturing in the Age of Trump - London September 2025Fracturing in the Age of Trump - New York October 2025

What tensions will yet erupt as the US–China economic relationship unravels? What will the global economy look like in 2040? And what should business and government leaders be doing now to adapt to an era of economic fracturing?The Fractured Age: How the Return of Geopolitics Will Splinter the Global Economy is published on 28 August. In this special episode, author and Group Chief Economist Neil Shearing joins David Wilder to unpack the book’s key lessons and to show how today’s headlines reveal the deeper forces driving economic fracturing. Explore Capital Economics' data and analysis on global economic fracturing and sign up for our fracturing events this September/October:Singapore (3rd Sept)Hong Kong (4th Sept)London (17th Sept)New York (9th Oct)