Newsletter – November 2025

Economic Developments and Outlook

In brief: The Global Economy showed renewed momentum with robust sales growth and expanding market opportunities, especially driven by China and India. Trade fragmentation and U.S. tariffs crimp global demand and investment.​ Geopolitical conflicts and policy uncertainty weigh on confidence.​ Government shutdowns (e.g., U.S.) and weak household spending add drags. Monetary policies varied, with some central banks maintaining rates and others, like South Africa, reducing rates in response to inflation trends. Inflation in several regions showed signs of peaking or easing, with core inflation rates slightly declining. The labor market remained mixed, with slight employment gains offset by rising long-term unemployment and elevated redundancies in some regions. Precious metals such as gold, silver, and platinum performed strongly, supported by supply constraints and investor demand amid geopolitical tensions. The cryptocurrency market experienced a notable correction after a flash crash earlier, with market cap retreating below its 2024 peak.

Global Economy Performance

The Global Sales Managers Index rose to 51.7 in November, reflecting acceleration in economic expansion led by strong sales growth to the highest level in over four years. Despite robust demand, ongoing caution around trade and geopolitical risks remains, with labor market weakness and subdued confidence as constraints to further growth.​

Private investment and consumption have held up strongly, aided by innovative technology investments in AI and green infrastructure, but risks remain, including geopolitical tensions and sovereign debt burdens, which could impact medium-term growth.

Trade tensions and tariff uncertainty continue to dampen confidence and disrupt supply chains, although some front-loading of purchases has supported industrial production. Inflation is expected to fall gradually globally, with the IMF forecasting global inflation to reach about 4.2% in 2025, down from higher levels but with the US inflation remaining above target. Monetary policies remain cautious with central banks balancing inflation control and economic growth support. Some regions, like the Eurozone, face risks of inflation increase due to supply chain disruptions and import price rises.​

 

Monetary Policies and Inflation

Monetary policy decisions in November were mixed; the Bank of England maintained a 4% rate, while some members favored reducing rates slightly. South Africa reduced its policy rate to 6.75% due to a balanced risk outlook on inflation. Inflation showed signs of peaking with UK CPI inflation at 3.8% in September and core inflation rates cooling in parts of Europe and Italy. These trends suggest underlying disinflation supported by restrained pay growth and economic slack.​

The inflation chart shows both headline CPI and core inflation rates, with a slight easing trend during the month, indicating peaking inflation pressures.

Labor Market Conditions

Employment showed slight improvements, but redundancies and long-term unemployment rose. The UK labor market noted 2.5 unemployed people per vacancy and increased long-term unemployment by 65,000 year-on-year, indicating continued labor market challenges. Potential redundancies remained elevated, suggesting subdued labor market conditions despite moderate economic growth.

Equity Markets

The US market is highlighted by continued volatility, but along with underlying strength in innovation-driven sectors and digital assets.

Precious Metals Market

Gold prices remained strong above $4,000 per ounce in November, supported by safe-haven demand amid geopolitical tensions. Silver approached $49 amid steady industrial demand, while platinum prices benefitted from supply shortages and recovering demand. Precious metals are expected to maintain momentum due to ongoing economic uncertainties and anticipated interest rate reductions.​

Cryptocurrency Market

The cryptocurrency market experienced significant corrections after a flash crash in mid-October. The total market capitalization fell to about $3.73 trillion, below the 2024 peak of $4.27 trillion, with sustained outflows and cautious investor sentiment dominating trading behavior.​

Market cap falls back below the 2024 peak

Economic Outlook for 2026: Modest, but Positive Growth

Global GDP growth is projected to slow moderately, yet remain resilient at about 2.7%, buoyed by AI-driven investments and proactive fiscal and monetary policies.

Inflation is expected to diverge, rising above 3% in the U.S. while remaining moderate or subdued in Europe and Asia.

Developed market central banks are likely to normalize rates closer to neutral, with governments focusing on infrastructure and strategic investments to counter geopolitical uncertainties.

The outlook for US equities toward the end of 2025 suggests moderate, single-digit gains with continued volatility, as earnings growth is expected to lead returns while valuation expansion slows. In 2026, the macroeconomic environment is projected to support risk assets including equities, driven by productivity growth, easing inflation, and potential Federal Reserve rate cuts.

For cryptocurrencies, 2026 is anticipated to be a blockbuster year, fuelled by factors such as advancements in artificial intelligence, strong corporate performance, and a more accommodative Fed. This environment could elevate cryptocurrencies significantly as macroeconomic conditions improve, with optimism around GDP growth and productivity gains.

Precious metals like gold, silver, and platinum are expected to see elevated prices through 2026, supported by interest rate cuts, strong central bank buying, and supply constraints. Gold is forecasted to possibly gain around 20% in 2026, with some experts predicting prices may reach $4,500 to $5,000 per ounce. Silver and platinum prices are also projected to rise before a mild correction in 2027.