The AI hype cycle shows no sign of slowing. But how much are the hundreds of billions in investment actually boosting economies, and when will that spending translate into meaningful productivity gains?

In this episode, Senior Economic Adviser Vicky Redwood discusses her new report, 'How deeply is AI taking hold in the economy?', the latest addition to Capital Economics’ analysis of AI’s global impact. In conversation with David Wilder, she separates hype from reality, covering:

• Which economies are benefiting most from the global AI build-out
• Why recent US productivity gains are evidence of AI’s impact
• If the conflict in the Middle East could disrupt the AI rollout
• Whether fears of an AI-driven jobs apocalypse are justified
• What the Citrini note gets wrong about AI’s macro impact

Read 'How deeply is AI taking hold in the economy?': https://www.capitaleconomics.com/publications/global-economics-focus/how-deeply-ai-taking-hold-economy

Our updated macro and market forecasts assess the impact on growth and inflation – and the likely central bank response – under both baseline and adverse scenarios for the Middle East conflict. In the latest episode of The Weekly Briefing from Capital Economics, Group Chief Economist Neil Shearing discusses why the more benign scenario would deliver a negative but manageable shock to the global economy, while a more adverse outcome could tip it into outright recession.

Also on the show, Deputy Chief UK Economist Ruth Gregory explains why gilts have been the hardest hit among G10 government bonds as tensions have escalated. She explores the sharp shift in expectations for Bank of England policy and the underlying fiscal vulnerabilities fuelling market anxiety – including the risk of a change in government leadership.

Read our latest Global Economic Outlook: https://www.capitaleconomics.com/publications/global-economic-outlook/forecasting-through-fog-war-1

Pity the poor central banker. As energy prices surge, they are grappling with the trade-off between growth and inflation, while trying to communicate this all to markets without triggering an unwanted tightening in financial conditions.

At the end of an unusually busy week for policy meetings, Group Chief Economist Neil Shearing and Chief Global Economist Jennifer McKeown assess how central banks are managing this difficult task, and whether investors are right to position for rate hikes from some banks that only a few weeks ago were expected to ease policy this year.

In the latest episode of The Weekly Briefing, they talk to David Wilder about issues including:

• How inflation risks in the global economy are crystallising as the conflict approaches its fourth week
• What separates central banks, from the Bank of England and ECB to the BOJ, RBA and the Fed, in how they are likely to respond
• Whether interest rate cuts would come back onto the table if the fighting were to end

Join our 26th March online briefings about our new macro and market forecasts: https://www.capitaleconomics.com/events/drop-global-economic-and-market-outlook-pricing-energy-shock