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What happened last week?


  • A new forecast predicted global trade growth would more than double this year.
  • The share of global electricity generated from renewable sources reached a record high last year.


  • The Bank of England held interest rates steady but signalled a cut in the summer.


  • A wholesale coffee price index hit its highest level in nearly half a century.

What does this mean?

The OECD predicted a sharp rebound in the international flow of products this year, as economic growth improves and inflation eases in many places. The group expects the global trade of goods and services to rise 2.3% in 2024 and 3.3% in 2025, mostly driven by the US and Asia. That’s much better than the 1% growth seen last year when rising prices, surging interest rates, and sluggish demand all weighed on activity.

The share of global electricity generated from renewable sources reached an all-time high last year – welcome news for a planet dealing with its 11th consecutive month of record-hot temperatures. According to a new study, renewables provided a record 30.3% of global electricity last year, up from 29.4% in 2022, as growth from green energy strongly outpaced that of fossil fuels. The improvement is thanks in part to a recent expansion of solar farms after China’s oversupply of panels led to a steep drop in prices, and it’s helping to nudge the world closer to its target of tripling renewable capacity by 2030.

Bank of England committee members voted 7-2 to keep its key interest rate unchanged at a 16-year high of 5.25%, with the two dissenting members calling for an immediate cut. The Bank struck an optimistic tone about its battle against inflation, suggesting it will lower rates this summer if price rises stay low. It also slightly upgraded its outlook for the UK economy, forecasting growth of 0.5% this year and 1% in 2025.

First chocolate, now coffee: not long after record-high cocoa prices alarmed chocoholics, the price of a popular coffee variety has soared to a 45-year high. The latest jump in the wholesale cost of robusta beans, which account for 40% of global coffee consumption, comes after hot and dry weather ravaged crops in Vietnam – the biggest producer of the beans.

This week’s focus: Keeping a stiff upper lip

Nervous investors will be peeking through their fingers this week, as the latest US inflation figures are released. They’re on edge for a reason: the last four reports all came in hotter than expected. And the most recent one was particularly bad, showing the annual pace of consumer price gains accelerating to 3.5% – its highest in six months. That was partly due to higher fuel costs, but even core inflation, which strips out volatile food and energy items, defied hopes for a slowdown and stayed flat at 3.8%.

Economists expect April’s inflation report to show both measures ticking down slightly when it’s released on Wednesday.

They see the overall figure coming in at 3.4% and the core measure at 3.7%. While those would mark tiny steps in the right direction, the fundamental problem remains: the inflation-cooling momentum seen through most of last year has all but stalled. That’s partly down to a solid labour market that’s powering some strong consumer spending, despite higher prices and borrowing costs.

That explains why the Federal Reserve (the Fed) is wary about its next move. The central bank, which has been battling the nation’s hot inflation with a series of interest rate hikes, has said that it wants to see price pressures crumble once and for all before it begins cutting the country’s lofty interest rates. Investors are starting to ponder an even bigger question: are US rates high enough to tame inflation? At its latest meeting, the Fed indicated that it’s not considering any new rate hikes to counter the recent uptick, saying it believes it’s done enough to bring inflation down toward its 2% target. If April’s report shows prices heating back up again, the central bank might have to change its thinking.

  • The Week Ahead

    • Monday: Nothing major.
    • Tuesday: UK labour market report (April), China foreign direct investment (April), US producer price index (April). Earnings: Alibaba, Home Depot.
    • Wednesday: US inflation (April), US retail sales (April), eurozone industrial production (March). Earnings: Cisco.
    • Thursday: Japan economic growth (Q1), US industrial production (April), US housing starts (April). Earnings: Baidu, Walmart, Deere,, Applied Materials.
    • Friday: China industrial production and retail sales (April).

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