Dispatches from Oxford Economics’ 2026 Global Outlook Conference: AI, tariffs and the new shape of growth
More than 350 leaders from the finance and business world gathered In London on 28 January for a lively exchange of ideas on the economic outlook for the year ahead at the 2026 edition of Oxford Economics’ flagship Global Outlook Conference.
The forum brought together a diverse client base, from asset managers, bankers, investors and academics to our own senior leadership team, all eager to move beyond the headlines and examine the fundamentals of a global economy in transition.
The day’s agenda featured a series of focused, in‑depth sessions led by a distinguished lineup of experts. Executive Chairman Adrian Cooper and Chief Executive Officer Innes McFee were joined by thought leaders including Chen Zhao, Founding Partner of our subsidiary Alpine Macro, who explored the evolving US‑China relationship, while Andrew Goodwin (Chief UK Economist) and Angel Talavera (Head of Europe Macro) unpacked the complexities of European fiscal policy. Martina Bozadzhieva, Managing Director, Macro & Investor Services, chaired a panel on geopolitics where the speakers provided a roadmap for navigating what they termed “the new world economic order”, rounding off a morning rich in insight and discovery.
In the afternoon, specialized breakout tracks allowed attendees to pivot between sector specific insights. Whether discussing the impact of AI, tariffs and fiscal activism on financial and real estate markets or exploring the implications of the economic outlook for consumer markets and industry at a sub national level, the message was clear – resilience is built through adaptability and informed foresight.
A new kind of economic cycle
Opening the proceedings, Adrian Cooper, Executive Chairman, provided a grounding perspective on the current climate. Global GDP growth has maintained a steady pace of just under 3% for three consecutive years, a trend expected to hold through 2026.
“Despite an environment of rising protectionism and political volatility, the global economy has proved remarkably resilient,” Cooper noted. “We continue to see a picture of steady but unspectacular growth, with sharp divergences appearing beneath the surface.”
Innes McFee, Chief Executive Officer, built on this by challenging the notion that we are in a “normal” business cycle. This isn’t a typical credit-driven expansion; rather, it is an era defined by how the global economy is being reorganized.
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During his presentation, McFee identified three structural pillars shaping the global economy:
- Strategic Protectionism: The transition of global trade into more localized, regional patterns.
- The AI Investment Supercycle: Massive, transformative capital deployment in data and hardware.
- Fiscal Activism: A shift toward governments playing a more hands-on role in managing economic cycles.
“The US remains a clear outperformer, buoyed by fiscal support and the AI boom,” McFee observed. “Meanwhile, China is navigating trade headwinds with targeted stimulus, while Europe’s outlook is markedly more downbeat, feeling the squeeze of energy costs and intensifying international competition.”
Protectionism: Impact vs. Adaptability
One of the most striking insights shared was the relative resilience of the macroeconomy in the face of US tariffs. According to McFee, Oxford Economics’ analysis suggests three reasons why the “tariff shock” hasn’t stalled growth:
- Contained Inflation: While importers have passed through roughly two-thirds of tariff costs to consumers, these goods represent a relatively small portion of the total US consumption basket.
- The AI Offset: While uncertainty has dampened investment in traditional sectors, the “build-out” phase of AI and data centres has been powerful enough to offset those losses.
- Supply Chain Agility: Global trade has proven incredibly nimble. Exporters have successfully rerouted goods through third countries or pivoted to emerging markets in Latin America and Asia.
The new trade map: China and Europe
McFee highlighted a critical shift in China’s economic identity over the past 25 years. No longer just a hub for low-cost goods, China has moved up the value chain. This evolution combined with falling Chinese export prices directly challenges advanced industrial economies, particularly Germany and Japan.
In this new landscape, Europe finds itself in a “three-way squeeze” between high energy prices, Chinese manufacturing prowess, and the magnetism of US industrial policy.
AI: Driving trade and wealth
Artificial Intelligence is currently playing a dual role. In the physical economy, it is a massive driver of trade; the US demand for advanced hardware is lifting high-tech manufacturing across Taiwan, South Korea, and Southeast Asia.
Simultaneously, AI is fuelling a “wealth effect.” Record-high equity markets have supported US consumption, though McFee cautioned that this makes the current expansion more sensitive to market volatility.
Looking ahead: The fiscal frontier
As the conference concluded, the focus turned to the “Fiscal Activism” now defining national strategies. From China’s industrial subsidies to the necessary belt-tightening in the UK and Italy, government policy is now a primary source of both opportunity and uncertainty.
Adrian Cooper’s closing sentiment captured the day’s theme: “Protectionism will continue to creep higher, and AI will remain the vital counterweight. Success in 2026 will depend on how organizations navigate China’s evolving role and the fiscal realities of the markets they inhabit.”
The message for 2026 is clear: While the headline growth numbers suggest a calm sea, the currents beneath are shifting faster than ever.
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