Monthly Monetary Updates 2026
An archive of Professor Tim Congdon's Monthly Monetary Updates from the year 2026. In this archive you can find a link to his Monthly Note videos, the Money Notes (PDF) and also the slides used in the Monthly Notes (PDF).
September: How to stop paying a 'moron premium' in government debt markets
Deposits at US commercial banks rose by just under 0.7% in August, i.e., at an annualised rate of 8.0%. This was after a couple of slower months, but annual money growth needs to be 5% or less to be consistent with the 2% inflation target. Meanwhile Indian bank credit and broad money continue to grow at annual rates in the mid-teens %, in the context of vigorous supply-side dynamism. Money growth has slowed in China since March. We have argued in recent commentary that - with these three economies accounting for roughly 40% - 50% of world output - the world economy would have been heading for above-trend growth in 2026 before the shock of the Iran hostilities. This view still seems reasonable, although the prospect is above-trend growth, not boom. The persistence of the Gulf hostilities – and the intensification of the Russia-Ukraine conflict – make conjectures about the world economy in late 2026 and 2027 hazardous. Broad money in the Eurozone is growing at a modest level, while in the UK it has slowed recently. Japan’s giant so-called “fiscal stimulus” has undermined the yen on the foreign exchanges.
August: An exposition of 'Congdon's Law' on debt interest payments, in the context of ever increasing US public debt
Money growth has slowed in the USA in the last three months, despite the unusually high Federal deficits in June and July. The data have to be watched to see if this is a new trend. Money growth has also slowed in China since March. By contrast, the Indian banking system continues to grow at annual rates in the mid-teens % on the back of booming credit and vigorous supply-side dynamism. We have argued in recent commentary that - with these three economies accounting for roughly 40% - 50% of world output - the world economy would have been heading for above-trend growth in 2026 before the shock of the Iran hostilities. This view may have to be rethought. The persistence of the Gulf hostilities – and the intensification of the Russia-Ukraine conflict – make conjectures about the world
economy in late 2026 and 2027 hazardous. Broad money in the Eurozone is growing at a modest level whereas in the UK it is somewhat on the high side relative to the 2% inflation target. The giant so-called “fiscal stimulus” in Japan has not led to an upturn in money growth. Massive foreign exchange intervention to support the yen has offset buoyant bank credit.
July:
- No video was produced in July
- Download the July 2026 Money Note
June: US broad money growth too high for 2% inflaton target
US commercial banks’ deposits have grown strongly in recent months, with the annualised rate of increase in the three months to 10 June being a disturbingly high 10.2%. In qualification, 2025’s boom in money market mutual funds stopped in the first quarter of 2026, even though the Trump administration continues to run an enormous budget deficit. Money growth has slowed in China since March. By contrast, the Indian banking system continues to grow at annual rates in the mid-teens % on the back of booming credit and vigorous supply-side dynamism. With these three economies accounting for over 40% of world output (and indeed about 50% on world output measured after adjustment for purchasing power parity), the world economy was heading for above-trend growth in 2026 before the shock of the Iran hostilities. These hostilities – which now seem to be over – plainly did affect energy prices, and then – for example – petrochemical and fertiliser prices. But the wider effects have been minor and manageable. Money growth in the UK has picked up as demand for new bank credit strengthens. It has also risen in Japan, but remains moderate – or even slow. In the Eurozone, the quantity of money declined during April.
May: Current wars and economic outlook
US money growth since autumn 2025 has been too high and - if it continues - US inflation won't remain, sustainably and over the medium term, at 2% a year. At present inflation is already above 2% as a result of the Iran war. Separately, Russia is losing its war with Ukraine and its allies, which include all the West apart from the USA. In the next few quarters Russia will fall further behind Ukraine plus its European and other Western supporter countries in drone production and quality. Ukraine has already been able – by sending drone and missile swarms – to destroy a significant proportion of Russia’s oil refining and arms manufacturing capacity. Its ability to do this can only increase in the rest of 2026 and 2027.
- Download the May 2026 Money Note
May: Current wars and economic outlook
US money growth since autumn 2025 has been too high and - if it continues - US inflation won't remain, sustainably and over the medium term, at 2% a year. At present inflation is already above 2% as a result of the Iran war. Separately, Russia is losing its war with Ukraine and its allies, which include all the West apart from the USA. In the next few quarters Russia will fall further behind Ukraine plus its European and other Western supporter countries in drone production and quality. Ukraine has already been able – by sending drone and missile swarms – to destroy a significant proportion of Russia’s oil refining and arms manufacturing capacity. Its ability to do this can only increase in the rest of 2026 and 2027.
- Download the May 2026 Money Note
April: Could Britain return to the 1970s?
In this video, Professor Tim Congdon asks whether the UK is returning to a similar situation to the 1970s - a time of record-breaking inflation and very high government bond yields. A glance at UK public finances reveals that they are not in good shape. The government is running a large deficit and the ratio of public debt to GDP is rising.
Having highlighted the problem of high interest payments on government debt in the January video, this month Professor Congdon focusses on another potential concern - the cost of the state pension. While pension provision constitutes a lower percentage of GDP compared to France or the "PIGS" countries, it is notably higher than in other anglophone nations, including Ireland. These countries have lower taxes and higher growth but pensioners are not poor due to the provision of private pension schemes. While may UK pensioners have a private pension, the "Triple Lock" is causing the state pension/GDP ratio to rise.
While the UK's fiscal position is not as bad as the 1970s. the influence of Keynesianism, which doesn't worry about high fiscal deficits, has left a big problem for the next government to sort out after the 2029 General Election.
March: Russia is not a super-power
In this video, Professor Tim Congdon forcefully argues that the idea of the world being split into three spheres of influence, headed by the USA, China and Russia, is false. Russia does not meet any of the qualifications of a super-power. Its GDP is smaller than that of the UK; its industry does not produce state-of-the-art items and indeed even its important arms industry has fewer overseas clients than before. Professor Congdon points out that size doesn't make you a super-power. Russia is a huge country, but there are some pretty large countries in Africa which no one would remotely consider to be super-powers.
February:
*** No video was produced in February 2026 ***
January: British debt - the case for a balanced budget rule
In this video, Professor Tim Congdon expresses concern about the excessive borrowing by UK governments since the Great Financial Crisis of 2007-2009, which contrasts sharply with the last 1990s and early 2000s when public debt was a much lower percentage of GDP. He places the blame fairly and squarely on neo-Keynesianism and its belief that the best way to deal with an econoic downturn is for governments to borrow more and spend more. A well-managed monetary policy, rather than fiscal largesse, is the key to stable and sustaned economic growth.