Leading Indicators | Inflation: the global divergence accelerates
Discover key economic and financial metrics, and what to look out for in the week ahead
2 minutes to read
Here we look at the leading indicators commodities, trade, equities and more. in the world of economics. Download the dashboard for in-depth analysis into commodities, trade, equities and more.
INFLATION DIVERGES GLOBALLY
The disinflation process in the Eurozone is underway. CPI data for June show that inflation in Italy and France continued to ease and even fell below the 2% target in Spain. German inflation, however, increased to 6.4%, largely due to base effects from last year's subsidised public transport. Overall, Eurozone inflation fell to 5.5% in June, from 6.1% in the month prior. US inflation stands at 4.0%, the lowest since March 2021, whereas UK inflation remains stubbornly high at 8.7%. Meanwhile, economic momentum in the Eurozone is weakening, with the Economic Sentiment Index (ESI) for the Eurozone declining further in June to a 7-month low. Confidence fell across all economic sectors, while consumer sentiment remained subdued. Despite this, at last week’s meeting in Sintra, Portugal, global central bankers suggested further policy tightening will be needed to tame inflation.
UK PROGRESS ON CLIMATE CHANGE SLOWS
The Climate Change Committee (CCC) concluded in its annual report that the UK government’s plans to hit net zero carbon targets are being missed. Greenhouse gas emissions have been falling by just under 3.0% a year, but the pace will need to double over the next eight years. At least 1-2 million homes will need to be upgraded and retrofitted each year to meet net zero targets, up from 159,600 in 2022. Meanwhile, Mayor of London, Sadiq Khan, has launched a new £500 million Green Finance Fund open to organisations in the Greater London Authority (GLA) group to help them achieve net zero by 2030. The first projects approved include solar panels on the roof of the London Stadium and Tube depots, and LED lighting at Underground stations.
RENTAL COSTS RANKED THE LOWEST CONCERN FOR UK BUSINESSES
The latest ONS BIC survey found that 67% of UK businesses reported some form of business concern in July 2023, the lowest percentage reported since March 2022. Falling demand of goods and services were the primary reported business concern at 14.6%, followed by inflation of goods and services prices (14.1%), and energy prices (12.3%). Despite being on the rise in a number of sectors, property rental costs remain the least reported business concern, reaching a 5-month low at 1.1%. Our latest (Y)our Space research supports these findings. From a global perspective, 55% of global occupiers expect to see an increase in total floorspace across their whole portfolio over the next three years.
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