Headlines

• Recent data suggest the risk of recession is lower than previously thought, but it remains our central case for the UK and the EU
• The UK posted zero growth in Q4, likely to be revised down
• The US hangs in the balance still, with equity markets and sentiment sending negative signals, but payrolls and activity data pointing the other way
• Medium-term expectations of US inflation show no signs of stickiness but, compared to other countries, US inflation has been flattered by the currency
• Your regular reminder: there is no official definition of what constitutes a recession
• Short-term forecast for the US suggests a couple of negative quarters are still likely, and annual growth will dip to zero before recovering
• Standing back from the noise and some of the more aerated commentary, this sort of pattern is to be expected after the COVID convulsion: a pause for breath, so to speak

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