Preliminary PMIs for May, published by Markit today, suggest that global growth remains subdued. In particular, Chinese manufacturing activity may have slowed further, and the recession in the euro...

Advanced economies remain awash with liquidity. The Japanese monetary base has been rising steeply for several months, even before the Bank of Japan’s policy shift, announced on 4th April.

World GDP growth picked up in the first quarter, after a very weak end to 2012. But it looks unlikely to accelerate further given the extended euro-zone recession and slowdown in emerging economies.

Weak commodity prices and a faltering global recovery suggest that inflation in advanced economies is likely to remain very low for the foreseeable future. This will support the case for continued...