🎓 Vanguard economic update: Outlook mixed as energy prices stay high
• Vanguard raised its 2026 UK growth forecast to 1.1% (from 0.6%) but also lifted its UK inflation forecast by 0.8pp to 3.6%, driven by higher energy prices.
• Bank of England is expected to raise rates by 0.5pp to 4.25% by end-2026, while the Fed is seen cutting once despite core US inflation ending the year near 2.8%.
• Euro area growth is cut to 0.8% (down 0.4pp) as the region's energy-import exposure pushes core inflation to 2.2%; ECB expected to hike ~0.5pp starting as early as June.
• China is the outlier — resilient Q1 growth reduces urgency for stimulus, so the PBoC is expected to hold rates and target sector support instead.
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