Skip to content
HSBC LogoHSBC Logo
Back to Insights
  • Video
  • Global Research
    • General Research Insights

Waiting for the main act

Video

Global Economics Quarterly

  • Globally, more central banks have started to cut rates…
  • …but with a bumpy road ahead for growth and inflation…
  • …the majors are still watching, and waiting to act

If there were any doubts we are in a different era for monetary policy, they were put paid to by the Bank of Japan's decision in March to finally lift its negative rate back to zero.

Globally, though, the tide has turned in favour of easing policy: Mexico and Switzerland's central banks the latest to join the rate-cutting club. But the main act has yet to start, with most G10 central banks – notably the US Federal Reserve, the European Central Bank and Bank of England – still waiting patiently in the wings.

With inflation no longer surprising on the downside and growth in many economies proving more resilient than feared, they seemingly have time on their side. Policymakers are waiting to become more confident that inflation will continue to head down to target on a sustainable basis before easing. Reading the data tea leaves is not getting any easier though: this is still a very complicated economic picture.

this is still a very complicated economic picture

On the growth side, there have been some green shoots in recent months. The US and India have outperformed again. Even in those parts of the world where data have disappointed for some time, including part of Europe and mainland China, the data are no longer getting worse, particularly in manufacturing. And there are early signs world trade may be picking up.

But inflation data have been less positive, with services inflation sticky in advanced economies like the US and eurozone. There have been upside surprises in Latin America and parts of Asia too. Central banks are watching to see whether this is a “bump in the road” or something more concerning.

Meanwhile, the problems at New York Community Bank (NYCB) served as a reminder that high interest rates can still act as a catalyst for big problems long after policy rates stopped rising. And this is all happening against an overlay of geopolitical conflicts and tensions which could mean further surprises ahead.

In this uncertain world, maintaining policy credibility and anchoring inflation expectations is critical for any central bank. We expect the Fed, the ECB and the BoE to start cutting interest rates in June. But the easing cycle that follows could be just as unusual as the economic expansion and tightening cycle that preceded it.

Our forecasts
Most of our growth forecasts are virtually unchanged from three months ago, but with the familiar exception of the US where our growth forecast has once again edged a little higher, as has India’s. Hence, we have lifted our annual average global GDP growth forecast for 2024 to 2.6% (from 2.4%). We also see GDP growth of 2.6% in 2025.  On inflation, too, our forecasts of only a gradual disinflation are much the same as at the start of the year. We anticipate global inflation of 5.8% in 2024, and 3.8% in 2025.

2.6%
Average global GDP growth forecast for 2024 (HSBC Global Research)
5.8%
Average global inflation forecast for 2024 (HSBC Global Research)

We admit, though, that there is even more uncertainty than usual about forecasts for next year given the possibility of escalation in geopolitical conflicts and the potential impact of elections in many parts of the world. Fiscal policy could also materially change the outlook. Difficult policy choices lie ahead for governments facing an array of new spending needs.

Would you like to find out more? Click here* to read a full version of the report. Please note, you must be a subscriber to HSBC Global Research to access this link.

If you have any questions, including on how to become a subscriber, please email at AskResearch@hsbc.com

* Please note that by clicking on this link you are leaving the HSBC Global Banking & Markets Website, therefore please be aware that the external site policies will differ from our website terms and conditions and privacy policy. The next site will open in a new browser window or tab.

Global Research

HSBC Global Research provides information, insights and thought-provoking ideas.
Learn more

The following analyst(s), who is(are) primarily responsible for this document, certifies(y) that the opinion(s), views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Janet Henry

This document has been issued by the Research Department of HSBC.

HSBC and its affiliates will from time to time sell to and buy from customers the securities/instruments, both equity and debt (including derivatives) of companies covered in HSBC Research on a principal or agency basis or act as a market maker or liquidity provider in the securities/instruments mentioned in this report.

Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment banking, sales & trading, and principal trading revenues.

Whether, or in what time frame, an update of this analysis will be published is not determined in advance.

For disclosures in respect of any company mentioned in this report, please see the most recently published report on that company available at www.hsbcnet.com/research.

Additional disclosures

  1. This report is dated as at 26 March 2024.
  2. All market data included in this report are dated as at close 25 March 2024, unless a different date and/or a specific time of day is indicated in the report.
  3. HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its Research business. HSBC's analysts and its other staff who are involved in the preparation and dissemination of Research operate and have a management reporting line independent of HSBC's Investment Banking business. Information Barrier procedures are in place between the Investment Banking, Principal Trading, and Research businesses to ensure that any confidential and/or price sensitive information is handled in an appropriate manner.
  4. You are not permitted to use, for reference, any data in this document for the purpose of (i) determining the interest payable, or other sums due, under loan agreements or under other financial contracts or instruments, (ii) determining the price at which a financial instrument may be bought or sold or traded or redeemed, or the value of a financial instrument, and/or (iii) measuring the performance of a financial instrument or of an investment fund.
  5. Janet Henry is a Non-Executive Director of HSBC UK Bank Plc.

This document has been issued by HSBC Bank plc, which has based this document on information obtained from sources it believes to be reliable but which it has not independently verified.  Neither HSBC Bank plc nor any member of its group companies (“HSBC”) make any guarantee, representation or warranty nor accept any responsibility or liability as to the accuracy or completeness of this document and is not responsible for errors of transmission of factual or analytical data, nor is HSBC liable for damages arising out of any person’s reliance on this information. The information and opinions contained within the report are based upon publicly available information at the time of publication, represent the present judgment of HSBC and are subject to change without notice.

This document is not and should not be construed as an offer to sell or solicitation of an offer to purchase or subscribe for any investment or other investment products mentioned in it and/or to participate in any trading strategy. It does not constitute a prospectus or other offering document. Information in this document is general and should not be construed as personal advice, given it has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on it, consider the appropriateness of the information, having regard to their objectives, financial situation and needs. If necessary, seek professional investment and tax advice.

The decision and responsibility on whether or not to purchase, subscribe or sell (as applicable) must be taken by the investor. In no event will any member of the HSBC group be liable to the recipient for any direct or indirect or any other damages of any kind arising from or in connection with reliance on any information and materials herein.

Past performance is not necessarily a guide to future performance. The value of any investment or income may go down as well as up and you may not get back the full amount invested. Where an investment is denominated in a currency other than the local currency of the recipient of the research report, changes in the exchange rates may have an adverse effect on the value, price or income of that investment. In case of investments for which there is no recognised market it may be difficult for investors to sell their investments or to obtain reliable information about its value or the extent of the risk to which it is exposed. Some of the statements contained in this document may be considered forward looking statements which provide current expectations or forecasts of future events. Such forward looking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors.

This document is for information purposes only and may not be redistributed or passed on, directly or indirectly, to any other person, in whole or in part, for any purpose. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. By accepting this report, you agree to be bound by the foregoing instructions. If this report is received by a customer of an affiliate of HSBC, its provision to the recipient is subject to the terms of business in place between the recipient and such affiliate. The document is intended to be distributed in its entirety. Unless governing law permits otherwise, you must contact a HSBC Group member in your home jurisdiction if you wish to use HSBC Group services in effecting a transaction in any investment mentioned in this document.

Certain investment products mentioned in this document may not be eligible for sale in some states or countries, and they may not be suitable for all types of investors. Investors should consult with their HSBC representative regarding the suitability of the investment products mentioned in this document.

HSBC and/or its officers, directors and employees may have positions in any securities in companies mentioned in this document. HSBC may act as market maker or may have assumed an underwriting commitment in the securities of companies discussed in this document (or in related investments), may sell or buy securities and may also perform or seek to perform investment banking or underwriting services for or relating to those companies and may also be represented on the supervisory board or any other committee of those companies.

From time to time research analysts conduct site visits of covered issuers.  HSBC policies prohibit research analysts from accepting payment or reimbursement for travel expenses from the issuer for such visits.

HSBC Bank plc is registered in England No 14259, is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of the London Stock Exchange. (070905)

© Copyright 2024, HSBC Bank plc, ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of insert issuing entity name. MCI (P) 061/09/2023, MCI (P) 073/10/2023, MCI (P) 007/10/2023, MCI (P) 008/01/2024

Issuer of report
HSBC Bank plc

  • Global Research
    • General Research Insights

Find out more

For more information on gaining access to Global Research, ASK Research using the button below.
ASK Research