Global Economics Comment: Spending Headwinds Still to Come on Both Sides of the Pond

Research evidence excerpt

Global Economics Comment: Spending Headwinds Still to Come on Both Sides of the Pond

Economics Research

17 June 2026 | 5:38AM BST

Global Economics Comment: Spending Headwinds Still to Come on Both

Sides of the Pond

n The interim US-Iran peace deal has diminished upside tail risks to energy prices: Megan Peters

+44(20)7051-2058 |

our oil strategists now see Brent declining to $80 per barrel in 2026Q4 (vs. $90 megan.l.peters@gs.com

Goldman Sachs International

previously) and our gas strategists also forecast slightly lower near-term prices

(although they leave their year-end forecasts unchanged). Moreover, consumer

spending has so far held up reasonably well on both sides of the Atlantic since

the start of the conflict. While these are both welcome developments for the

growth outlook, we see three reasons why it is too early for complacency on real

income and consumer spending in the coming months.

n First, while gasoline prices jumped shortly after the start of the war (and may

ease following the recent interim deal), the passthrough from wholesale gas and

electricity prices to consumers is more drawn out. Second, seasonal spending

patterns should amplify the hit to income this winter when energy demand

peaks, especially in Europe. Lastly, while outsized tax refunds dampened the real

income hit in the US this spring, this temporary boost is now behind us and we

expect real cash flow to stagnate on a year-on-year basis in H2.

n Based on historical statistical relationships, we estimate that each 1% pullback in

real cash flow from an energy shock results in a 0.6% decline in consumer

spending after two quarters. Our model is able to explain the limited

consumption impact of higher energy prices so far but projects more meaningful