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The upcoming Presidential election does not seem to be having much impact on economic activity either in the US itself or elsewhere. Admittedly, it looks at first sight as if recent movements in global equity markets have been driven by changes in Clinton …
6th October 2016
Global monetary conditions are still exceptionally accommodative and are set tor emain so even if the Fed raises rates in December, as we think is likely. Sovereign bond yields are close to record lows, and the yields on riskier bonds have fallen sharply …
5th October 2016
The tone of the IMF’s latest World Economic Outlook, published today, was decidedly gloomy. But we suspect that their forecasts will need to be lowered further over the coming year or so. … What to make of the IMF's latest …
4th October 2016
The manufacturing PMIs published today and late last week suggest that global growth was broadly steady in September. The biggest news was from the US where the ISM manufacturing survey rebounded sharply. … Global Manufacturing PMI (Sep. …
3rd October 2016
The Bank of Japan’s decision last week to begin targeting long-term bond yields marks a major shift in the conduct of monetary policy and is the latest sign that central banks are worried about the adverse side effects of very low long-term rates. In our …
30th September 2016
It is impossible to be sure what Donald Trump would actually do if he became US President but ourbest guess is that he would back away from his most radical proposals on trade policy. And even if he carried out his threats, the consequences would probably …
26th September 2016
Flash PMIs published today point to a small pick-up in growth in the manufacturingsector in Japan and the euro-zone, but a decline in the US. Advanced economies overallare still struggling, whereas recent news from China has been encouraging. … Flash PMIs …
23rd September 2016
The volume of world trade appears to have recovered a bit in the past few months.Even so, the prospects for global trade over the coming years remain poor, and couldworsen dramatically if Donald Trump wins the US Presidency in November. … Downturn easing, …
22nd September 2016
Average inflation in the G7 is likely be over 2% next year as the impact of past falls in energy prices fades. In the US, core inflation is already close to the target and will probably continue rising as the economy approaches full employment. Inflation …
16th September 2016
Weak US retail sales data for August, released earlier today, were the latest sign that the consumer recoveryin the developed world is losing pace. Even so, the prospects for household spending over the next fewyears are still fairly bright. This in turn …
15th September 2016
With global growth still lacklustre, monetary policy seemingly ineffective and government bond yields unprecedentedly low, the case for fiscal stimulus has become more compelling. Partly as a result, we now expect advanced economies overall to benefit …
7th September 2016
The latest surveys suggest that the UK economy has slowed but not slumped following the EU referendum, while growth in the world as a whole has remained sluggish. The US economy looks set to pick up a bit after a very weak first half of the year while …
6th September 2016
Without a crisis to concentrate minds, G20 leaders meeting in Hangzhou are unlikely to make any major policy breakthroughs. The truth is that there is little appetite for coordinated policy action, despite all the fine words to the contrary. That said, we …
2nd September 2016
Business surveys published earlier today paint a mixed picture of global manufacturing conditions. Activity in China appears to have stabilised, but the sharp fall in the US ISM index suggests, at face value, that manufacturing output there is contracting …
1st September 2016
Policymakers gathering in Jackson Hole last week highlighted that a fall in equilibrium real interest rates means that central banks may have little room to cut rates in the event of another recession. Unconventional policies such as QE and forward …
Money and credit growth in the major advanced economies have held up remarkably well this year, despite overall economic growth remaining lacklustre. Indeed, lending to households is now expanding more rapidly than at any point since 2008. … Lending …
26th August 2016
This week’s Jackson Hole conference is unlikely to shine much light on the immediate outlook formonetary policy either in the US or elsewhere. But it will underline how concerned many centralbankers are that they have little firepower left to respond to …
The latest available data show that the volume of world trade fell in Q2, although this does not seem to have dented global economic growth, which we estimate to have picked up from 2.1% annualised in the first quarter to 2.9% in the second. While the …
24th August 2016
Preliminary survey data for August, which were published today, suggest that economic growth remained slow but steady in advanced economies. Meanwhile, alternative survey evidence for the UK has been more reassuring than the PMIs for July. … Flash PMIs …
23rd August 2016
The global economy is set to expand by less than 3% for the second year running in 2016. That is a lot less than the 4%+ growth rates seen a decade ago. But in the grand sweep of history, current growth rates are not unusually weak, nor do they suggest …
18th August 2016
The world’s main current account imbalances look set to widen a bit in the coming years but should not pose a serious threat to the global economy. Oil producers’ surpluses probably won’t reappear, while the surplus in China and deficit in the US will …
16th August 2016
Unemployment has continued to fall steadily in most advanced economies, but there is still some sparecapacity left. Moreover, the link between unemployment and wage growth is weaker than in the past,so even as economies near full employment, inflation is …
10th August 2016
The initial evidence suggests that the UK’s vote to leave the EU has caused its economy to slow sharply. That has already prompted the Bank of England to ease policy, and we suspect it will cut rates again in the coming months. However, activity …
4th August 2016
Business surveys published today suggest that global manufacturing growth picked upin July, bucking the near-continuous downward trend seen since 2013. … Global Manufacturing PMI …
1st August 2016
National accounts data released in recent weeks suggest that global growth edged up in Q2. Butprospects for the rest of the year are mixed. The euro-zone economy will probably slow further and theUK will do no better than stagnate, whereas we expect …
We have scaled back our forecasts for rate hikes in the US, but still expect the Fed to raise interest rates further than is priced in by financial markets during the coming two years. At the same time, a lot more central banks are likely to reduce …
29th July 2016
We expect the ECB and Bank of Japan to step up their asset purchases a bit in the coming months and the Bank of England (BoE) to resume its QE programme after a four-year break. Indeed, “global QE” will probably be as large in the coming twelve months as …
28th July 2016
It is early days, but the limited data released since the EU referendum, as well as the reaction in financial markets, support our view that the economic implications of Brexit outside the UK will be negligible. … Global fallout from Brexit: one month …
25th July 2016
Preliminary business surveys for July suggest that activity is contracting sharply in the UK following the Brexit vote. But there is no sign that other economies have been hit. … Flash PMIs …
22nd July 2016
For the world as a whole, the economic impact of the UK’s vote to leave the European Union should be negligible. Nonetheless, growth looks set to remain lacklustre in advanced economies. And with inflation below target, central banks in the euro-zone and …
The latest available data show that world trade, which has been pretty stagnant for the past eighteen months or so, remains depressed. And with the UK’s Brexit vote having further reduced the chances of significant trade liberalisation, trade growth is …
21st July 2016
Having spent the past few months warning that Brexit would cause “severe regional and global damage”, the IMF today all but admitted that it had been bluffing, and acknowledged that economic growth outside Europe would be “little affected”. … IMF changes …
19th July 2016
Fiscal policy in advanced economies is looser this year than last and may well be eased further in the years ahead. In Japan, policy makers are on the cusp of announcing a large supplementary budget, and the UK government has scrapped its fiscal targets …
In our view, the claim that there is too much debt in the world is simplistic. High and rising debt burdens are a serious concern in some countries, including China and Japan. But debt burdens in most advanced economies are under control, while lower …
14th July 2016
The UK referendum result may ultimately lead to the British government pursuing more liberal trade policies with the rest of the world. But progress is likely to be very slow. Meanwhile, the prospect of the UK leaving the EU has extinguished what little …
13th July 2016
We expect China’s economy to slow further next year and the renminbi to continue depreciating. Nonetheless, the risk of a “hard landing” or large currency devaluation is low, so China is unlikely to be the source of a global economic shock any time soon. …
11th July 2016
Developments over the past few days have revived concerns about the consequences of Brexit for theglobal economy. But they have not changed our view that the economic impact outside the UK and ahandful of EU countries will be small. … Brexit is a local, …
7th July 2016
It’s early days but we see no reason to change our view that the global economic fallout from the UK referendum result should be minimal. The UKrecovery will probably falter due to heightened uncertainty about the country's future relations with the EU27, …
5th July 2016
Business surveys published today suggest that global manufacturing growth ticked up in June. Note, however, that almost all the survey responses were received before the UK’s vote to leave the EU. The global manufacturing PMI edged up from 50.0 to 50.4, …
1st July 2016
In the immediate aftermath of the UK referendum, central bankers have concentrated on providing verbal reassurance, but they may soon back their words with action. We think the Bank of England will cut its key policy rate to only 0.25% in July or August …
29th June 2016
The latest monetary data are consistent with a gradual slowdown in advanced economies, but do not point to a collapse in growth. Looking ahead, global central banks are likely to respond to the UK referendum result by leaving policy looser for even …
27th June 2016
Once the dust has settled, the global economic implications of the UK’s vote to leave the European Union are likely to prove much less dramatic than many had suggested during the past few weeks. The adverse effects on the UK itself and the direct impact …
24th June 2016
Preliminary business surveys published today suggest that growth in advanced economies remained stable, but pretty weak, in June. … Flash Manufacturing PMIs …
23rd June 2016
Many measures of inflation expectations are at, or close to, record lows. We do not think this means that the world as a whole is heading for a long period of very low inflation, or even deflation. But the recent data continue to highlight that the risks …
21st June 2016
Following the FOMC meeting earlier this week, we have lowered our forecasts for the fed funds rate at the end of 2017 and 2018. But two key themes remain unchanged: global monetary policy will continue to be very loose, and US monetary policy is likely …
17th June 2016
Although it is far from perfect, the global manufacturing PMI published by Markit seems to be the most reliable timely indicator of the strength of the world economy. It currently suggests that global growth has slowed somewhat, but that it has certainly …
15th June 2016
Global growth fears have re-emerged in recent weeks, but we think that prospects are still reasonably bright. In particular, conditions are in place for a period of steady, if unspectacular, growth in household spending. This should be sufficient to drive …
14th June 2016
Headline inflation will rebound in many countries in the coming months as the effects of the slump in oil prices drop out of the annual comparison. But the era of very low inflation is likely to continue for a long time yet. Underlying price pressures …
9th June 2016
It is often claimed that central bankers are less committed to their inflation targets than they were before the global financial crisis, but a closer look suggests that there has not been a dramatic change. Policymakers are prepared to tolerate inflation …
6th June 2016
The weak US non-farm payrolls data for May and uncertainty ahead of the UK referendum on EU membership, scheduled for 23rd June, may push back the next Fed rate hike until July at the earliest, if not September. Nonetheless, we still think that the US …
3rd June 2016
