We expect the current period of strong economic growth in advanced economies to continue for the next year or two, led by rising household consumption and business investment. In many countries the labour market is approaching full employment, but inflation is low almost everywhere and in most economies it will stay below central bank targets. Against this backdrop, policy-makers in Europe will withdraw policy stimulus gradually while the US Fed raises rates faster than financial markets expect. Meanwhile, some major emerging economies are coming out of recession but China is set to slow.
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