Global economics, January 2026

A report on 20 of the most important influences, changes and situations in global economics, for January 2026.

1 Inflation Eased in the US.

Energy prices fell 1.5% in January, used car prices slid 1.8%, contributing to cooler US CPI. In addition, the annual Consumer Price Index, the inflation indicator, slows to 2.4%.

2 Job growth in the US

Non farm payrolls increased by 130,000 jobs and the unemployment rate was 4.3%. Beating expectations.

3 Global growth forecast

India: 6.2%

Indonesia: 5.0%

China: 4.5%

Saudi Arabia: 4.0%

Nigeria: 4.3%

United States: 2.3%

Eurozone: 1.2%

United Kingdom: 1.2%

Global GDP projected at 2.6% as of January 2026.

4 Eurozone Inflation and Unemployment

In the Euro area, annual inflation was 1.7% and unemployment 6.2%.

5 Labour Market Weakening in the United Kingdom

UK unemployment reached 5.2%; the highest in 5 years.

6 Increased inflation in Germany

Germany, the largest and most influential economy in Europe, had it's headline inflation confirmed at a slightly increased 2.1%

7 Bulgaria joined the Eurozone

Bulgaria adopted the Euro and became the 21st member of the European Union.

8 India and Germany create a Free Trade Agreement

After 20 years of negotiations, India and Germany sign a Free Trade Agreement covering a combined market of 2 billion people, approx. $27 trillion in GDP and the elimination of tariffs on 96% of goods and services between both markets.

9 World Economic Forum, held in Davos, Switzerland

The 56th WEF was held on the 19th - 23rd January 2026, in Davos, Switzerland, to shape policy on global growth, trade, innovation and investment.

10 Volatility in the US Stock Markets

On the 20th January, the US equity markets experienced a sharp sell off;

S&P 500: down 2.1%

Nasdaq Composite: down 2.4%

Dow Jones: 870 point drop.

The sell-off was instigated following tension with European allies, over tariff propositions. The incident reflected the potential levels of market risks and sentiment.

11 Faltering of the US currency.

The US dollar index fell 1.4% mid January before rebounding, reflecting existing risk sentiment.

12 Oil Price

Brent is $70 / barrel

WTI is $65 / barrel.

13 Metals

Gold and silver spiked on safe haven flows; gold briefly reached above $5000 / oz; indicating the levels of interest from investors for safe, secure options.

14 Equity Performance

UK FTSE: +3 %

EU Euronext: +2.9 %

US S&P 500: 1.45 %

Japan Nikkei: +5.9%

MSCI Emerging Markets: +8.9%

The difference in market performance between regions highlights the differences in macro and geopolitical policies.

15 Central Bank Policies

Rates were held at all major central banks as inflation stands steady at 2%

17 UK Business Price and Wage Expectations

UK firms reported a 3.7% price inflation on their own products / services and a 4.4% wage growth.

18 Risk of US Fiscal Uncertainty.

Fiscal risk from potential US government shutdown pressure affected investor confidence.

19 Trade and Tariff Tension

US tariff threat of 10%, rising to potentially 15% on European, Canadian goods, had the affect of inflaming markets at the mid-month point, as protectionist policies threatened global supply chains.

20 Total Global VC funding

Total global VC funding for January was $55bn. AI: £31.7bn. Other sectors (hardware, healthcare/biotech, fintech, logistics and energy) combined: $23bn.

End of Report.

Curated by Xecology.