Monthly Insights - July 2024

The focus this week is squarely on developed market central banks which are seemingly poised to (finally) cut policy rates, with the exception of the Bank of Japan which raised its target rate on Wednesday. The Bank of England meeting today is a close call, but we think the MPC will hold off on cutting rates for now, given still high services inflation and substantial public sector pay rises announced by the new chancellor. However, the Fed has signalled that September is a “live” meeting for a rate cut, provided there are no big inflation surprises before then. This has been our call since April, and we still expect two 25bp rate cuts before the end of the year.

In the GCC, private sector growth has remained resilient in the face of higher rates, underpinned by significant investment in infrastructure. We expect this to remain a key driver of growth over the medium term. Soft demand from China may limit the ability of OPEC+ countries to start unwinding voluntary production cuts as planned in Q4.

Click here to download Monthly Insights July 2024