#dWP-VW.THINKTANK I Q4/2026

Keir Starmer’s Labour government wants to get closer to Europe, but must choose from a range of options.

International Monetary Fund Managing Director Kristalina Georgieva said that after facing crisis upon crisis in recent years, the world needs to build foundations that can withstand shocks that have become more frequent.

The European Central Bank’s resolve to uphold its inflation-quashing reputation risks luring it into a damaging error when it meets this week, economists warn.

In the hope he’ll land a job in finance, Andre Bonnick spends hours rehearsing what he’s going to say. He’s using key words from job listings, making eye contact — following advice he’s gotten from recruiters.

The evolving conflict in the Middle East is having significant humanitarian costs and testing the resilience of a global economy boosted by with solid underlying strong AI-related activity. The prices of energy and other key inputs produced in the Persian Gulf have soared since February, pushing up headline inflation, and some signs of supply shortfalls are emerging amidst disruptions to production and exports. Given the exceptionally uncertain situation this Economic Outlook presents two distinct scenarios of how the global economy could evolve over the next eighteen months. A time-limited disruption scenario, with energy production in the Gulf economies recovering from the third quarter of 2026 would result in global growth moderating in 2026 before picking up in 2027. A prolonged disruption scenario, with supply constraints persisting until the latter half of 2027, would result in significantly weaker growth outcomes and substantially higher inflation in both 2026 and 2027. The slowdown could be exacerbated if AI investment is adversely impacted by disruptions to the supply of energy and other key products or if national export restrictions are introduced. Amidst heightened uncertainty, flexible and agile public policies are needed to ensure macroeconomic stability. Key medium-term policy priorities also remain, such as the need to establish a credible fiscal path to debt sustainability, enhance energy security and resilience, secure a lasting decline in trade tensions and strengthen the prospects for sustainable and resilient growth.This issue includes an assessment of the global economic situation, a chapter on government policy responses to current energy crisis and policies to strengthen energy resilience, a chapter on the economic consequences of higher defence spending and a chapter summarising developments and providing projections for each individual country. Coverage is provided for all OECD Members as well as for selected partner economies.

Euro-area inflation topped 3% for the first time in more than 2 1/2 years, cementing expectations for an interest-rate hike when the European Central Bank meets next week.

The euro-zone economy shrank at the start of the year after an unprecedented contraction in Ireland forced a revision to data that originally showed feeble growth.

US job growth topped all forecasts in May and the unemployment rate held steady, offering the clearest sign yet that the labor market may be breaking out of a prolonged period of lackluster hiring.

President Donald Trump said he was weighing proposals for the US government to partner with major artificial intelligence firms, and would soon discuss the idea with the firms’ executives.

President Donald Trump said he was weighing proposals for the US government to partner with major artificial intelligence firms, and would soon discuss the idea with the firms’ executives.

The European Union is gearing up to warn its citizens and companies about a potential trade war with China as the bloc starts weighing new restrictive measures against Beijing aimed at resetting an imbalanced economic relationship.

The European Union is gearing up to warn its citizens and companies about a potential trade war with China as the bloc starts weighing new restrictive measures against Beijing aimed at resetting an imbalanced economic relationship.

The fate of the global economy hinges on the conflict in the Middle East that has already stifled growth and could yet trigger recessions and significantly stronger inflation, the OECD said.

The fate of the global economy hinges on the conflict in the Middle East that has already stifled growth and could yet trigger recessions and significantly stronger inflation, the OECD said.

US manufacturing activity expanded in May at the fastest pace in four years, bolstered by a pickup in new orders and production.

Cost savings from automation are broadly falling short of projections, according to a new Bain & Co. global survey of large companies.

Senior government officials have warned Russian President Vladimir Putin that spending on the war in Ukraine is on an unaffordable path, the most serious sign of internal division in Moscow since the full-scale invasion began.

Anthropic PBC raised $65 billion in a funding round that valued the artificial intelligence company at $965 billion including the new investment, eclipsing rival OpenAI’s value.

Inflation stayed well above 2% in the euro zone’s four top economies, backing the case for the European Central Bank to raise interest rates for the first time since 2023.

European Central Bank Governing Council member Fabio Panetta acknowledged the case for an interest-rate hike while urging colleagues not to flag subsequent tightening.

Stablecoins pose a number of risks to financial stability and monetary policy, and the European Central Bank’s best response is to ensure that public money remains the anchor of the system, according to Executive Board member Isabel Schnabel.

European car sales climbed for the third consecutive month in April as consumers continued to snap up more electric and hybrid models.

Germany and Spain are leading opposition to European Commission plans to ban Chinese technology suppliers from telecom networks as part of new cybersecurity rules, according to people familiar with the negotiations.

South Africa is poised to delay the retirement of about a fifth of its coal-fired electricity-generation capacity as gas projects earmarked to replace them remain behind schedule, contrasting a decline in use of the dirtiest fossil fuel in other developing nations.

The rapid spread of artificial intelligence may enable European banks to reduce their headcount by as much as a fifth over the “shorter term,” according to Morgan Stanley analysts.

Economic advisers to German Chancellor Friedrich Merz almost halved their forecast for growth this year as the war in the Middle East and US trade policy weigh on activity.