Higher energy prices won’t derail the global recovery
The global recovery from the pandemic will be dented but not derailed if high energy prices persist throughout 2022, our modelling finds. In an extreme scenario where oil, gas and coal prices remain elevated indefinitely, global growth would still be 4.0% and 2.8% in 2022 and 2023 respectively, knocking 0.5ppts and 0.7ppts off our baseline forecast.
What you will learn:
- We find that while some economies would suffer sizeable GDP impacts, the global impact is more moderate.
- Equities and bonds would take a sizeable hit however, as growth slows
- While we don’t see the recovery in global GDP being
derailed by higher energy prices, financial markets would
feel the effects much more keenly
High debt costs suggest European office price correction
Our analysis suggests a 10% correction is needed on average for the major office markets in Europe to compensate for the higher cost of debt, with prime yields required to soften by 10bps-75bps to generate a low-risk interest coverage ratio at a reasonable LTV.Find Out More
Why an ageing population doesn’t mean soaring inflation
What’s the future for inflation? Joachim Nagel, the new president of Germany's central bank, believes the rapidly ageing global population will play a key role – ramping up pressure on prices in the medium term. While we agree slowing labour supply will stifle output growth, in his recent discussion Nagel failed to fully consider the demand side of the argument.Find Out More