Week Ahead Economic Preview: Week of 19 January 2026

The following is an extract from S&P Global Market Intelligence's latest Week Ahead Economic Preview. For the full report, please click on the 'Download Full Report' link.

Flash PMIs updated alongside US inflation and GDP for mainland China

In addition to flash PMI updates, GDP data for mainland China are accompanied by inflation numbers for the US and UK, the latter also seeing new job market statistics. The Bank of Japan meets to set interest rates.

China will release its mainland GDP data for the fourth quarter, which we anticipate will show a 4.5% annual increase. This would be the lowest rate since the start of 2023, although it concludes a year in which the Chinese economy grew by 5%, matching the forecast for 2024. While growth is expected to slow to 4.6% in 2026, it is likely to become better balanced. In particular, sustained stimulus measures—including further interest rate cuts, fiscal spending, and industrial policies—are anticipated to help drive stronger growth contributions from domestic demand in the coming year. Updates to industrial production, retail sales, and investment data will provide insights into how this economic rebalancing is unfolding.

Meanwhile, the Bank of Japan meets to set interest rates, having previously raised its policy rate to 0.75% in December. Although this marked a 30-year high, the rate remains low by international standards, keeping the currency under pressure. With signs of strengthening growth and inflation, as indicated by PMI surveys, the BOJ appears poised for further tightening but will likely adopt a cautious approach, weighing risks from geopolitics and trade. As a result, many economists expect no change in policy at the January meeting but will be watching for future guidance.

In the US, a further estimate of third-quarter GDP growth is likely to be overshadowed by PCE inflation numbers for November. After the consumer price index indicated inflation remained subdued at 2.7% (with core inflation unchanged at 2.6%) despite tariffs, analysts will be eager to get a check on these figures. The latest available PCE inflation rate (core and headline) for September was 2.8%.

In Europe, the main economic news comes from the UK, with updates to labour market, retail sales, and inflation statistics. These data follow a stronger-than-expected GDP reading for November, which aligned with the sluggish growth trend signalled by the PMI late last year, and a marked slowdown in inflation to 3.2% in November. A further drop in inflation will increase calls for further rate cuts from the Bank of England, especially if labour market data continue to disappoint. Recent months have seen sharp job losses, which survey data indicate persisted through to the year-end.