December 2025
The latest edition of Ahead of the Curve looks at 2026, with insight into what the team at Capital Economics expects to drive macro and market outcomes in the coming year.
Will the AI bubble continue to inflate? Will US-China tensions flare up again? What will regime change at the Fed mean for US rates? Group Chief Economist Neil Shearing guides you through what what we expect to be the major drivers of global macro in 2026.
Neil’s The Fractured Age has been named one of the books of the year by the Financial Times. It’s a distillation of years of analysis from our economists and shows decision-makers how the breakdown in US-China relations will shape macro and market outcomes in the coming years. Here’s a review from the FT’s Martin Wolf.
The dominant narrative that this is a Russia-China partnership “without limits” doesn’t stand up to scrutiny. In this recent online briefing, we answered client questions about the strict limits of these bilateral economic and financial relations, and weighed the consequences for China’s competition with the US-led bloc of countries.
We were sceptical amid the extraordinary groundswell of optimism surrounding the European outlook at the start of 2025. As the year draws to a close, this special podcast looks at why the economy is persistently failing to meet its potential, despite the increased urgency in this fractured world.
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The tumult surrounding the UK Autumn Budget has raised enough questions about the survival of PM Keir Starmer and Chancellor Rachel Reeves that we were prompted to outline the market impact scenarios around their possible defenestration, ranging from a gilt rally to a sharp, Truss-esque sell-off.
An inflating stock market bubble has been drawing inevitable comparisons with the dotcom boom and bust. Chief Markets Economist John Higgins explains why, when the bubble does burst, the fall will be shallower and shorter-lasting than the sell-off which began in March 2000.
From ongoing falls in house prices to equities outperforming, here are six calls where our China team breaks from the consensus on what to expect from the Chinese economy and markets in 2026.
Get in touch today to find out how our award-winning analysis can help you make better decisions faster in 2026.