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While world trade volumes rebounded in July, they only recovered ground lost the previous month. The big picture is that world trade is set to remain weak in the coming months as the global industrial downturn drags on. Data published this week by the CPB …
27th September 2019
With interest rates near the lower bound, central banks are experimenting with tiers. But they reduce the impact of rate cuts and do little to support banks’ profitability. Such efforts add to signs that monetary policy is near its limits. Recent weeks …
26th September 2019
Flash PMIs for September suggest that advanced economies ended Q3 on a weak footing. The surveys also point to weaker exports, jobs growth and core inflation. The fall in the euro-zone composite PMI, to a 75-month low, indicates that the economy almost …
24th September 2019
The ruling by the Supreme Court in the UK that the Prime Minister’s decision to prorogue Parliament was “unlawful, void and of no effect” and that the suspension should be “quashed” as soon as possible increases the chances of a delay to Brexit and …
Since securing re-election this year, the Modi government has made it a formal aim to almost double the size of India’s economy to US$5trn by March 2025. In our view, the government is likely to fall short of this lofty ambition. Even so, we think that …
23rd September 2019
Table of Key Forecasts Overview – Inflation has fallen in most economies, due partly to lower energy inflation. Our forecast that oil prices will stabilise in the months ahead is subject to upside risks from tensions in the Middle East. But against the …
20th September 2019
The attack on Saudi oil is unlikely to be a disaster for the global economy. Saudi production might resume quite quickly and even if it doesn’t, the implications for oil prices and developed economy inflation should be limited. But growing tensions in the …
16th September 2019
Consumer spending continues to be a relative bright spot in the global economy. Spending growth picked up to a healthy 2.9% quarterly annualised in the advanced economies in Q2 (see Chart 1), reflecting marked improvements in the US and Japan. But the …
12th September 2019
Negative policy rates have had some positive effects in the economies where they apply and the direct adverse consequences have been small. But the policy has contributed to a fall in long-term interest rates which is doing greater damage to banks’ …
5th September 2019
The small uptick in the global manufacturing PMI in August offers little comfort about the state of the world economy. The index still points to very weak global production growth, the downturn in the US is deepening and the future output indices have …
3rd September 2019
The Prime Minister’s decision to suspend Parliament from sometime in the second week of September until 14 th October increases the downside risks to the British economy and the pound by decreasing the chances of a further delay to Brexit and increasing …
28th August 2019
World trade volumes contracted again in the second quarter, and forward-looking indicators suggest that trade growth is likely to stay subdued, just as the US-China trade war is heating up again. Data published last week by the CPB Netherlands Bureau …
27th August 2019
PMI surveys for August imply that growth in advanced economies has slowed further in the third quarter. But one crumb of comfort is that the weakness in manufacturing has not yet weighed much on services. Markit’s flash composite PMIs, published today, …
22nd August 2019
The current global economic slowdown may descend into something more serious if manufacturing drags services down with it. Fortunately, there are reasons to think that the spillovers from the industrial slump will continue to be limited, at least during …
21st August 2019
Inverted yield curves in the US and elsewhere tell us very little about the timing of future downturns and, for now at least, the economic data are more consistent with a slowdown than a downturn in the world economy. That said, there are clear risks to …
15th August 2019
We’re comfortable with our below-consensus forecast for global growth but, for now, the increasingly gloomy view priced into bond markets seems difficult to square with the latest economic data . Regular readers will know that we’ve been among the most …
8th August 2019
Sentiment regarding the near-term prospects for the global economy has soured over the past week or two, triggered in part by the escalation of the US-China trade war. Indeed, there are increasing signs – such as the slowdown in investment growth in many …
While the recent escalation of the US-China trade war may have occurred a bit earlier than even we had anticipated, it fits with our below-consensus forecast for global growth this year and next. What’s more, it reinforces our view that the direction of …
6th August 2019
China is left with few good options to hit back at the US in ways that wouldn’t be self-defeating. Rather than direct retaliation, officials are therefore likely to focus their efforts on broader measures to offset the drag from US tariffs, including …
The further fall in Markit’s global manufacturing PMI in July adds to the evidence that industry remained in the doldrums at the start of the third quarter, with forward-looking components suggesting that a recovery is unlikely anytime soon . The global …
1st August 2019
May’s small rise in world trade volumes added to evidence that trade growth may have begun to stabilise following the slump that began in Q4 last year. But we see little sign of a recovery coming any time soon. Data published yesterday by the CPB …
26th July 2019
Advanced economy PMI surveys for July revealed that the relatively resilient services sector struggled to support growth, as the industrial downturn deepened. And the latest results of the Global Business Outlook surveys support our view that the slowdown …
24th July 2019
The IMF has revised down its global growth forecasts, but they are still much stronger than our own. Its forecasts for advanced economies look particularly optimistic and we think that the changing monetary policy stance will take longer to bear fruit …
23rd July 2019
Table of Key Forecasts Global Overview – We see world GDP growth slowing further as the US succumbs to the weakness which is already evident elsewhere. The downturn in global manufacturing is spreading to the services sector and labour markets are also …
19th July 2019
Several timely economic indicators have lurched down recently, suggesting that even our below-consensus global growth forecasts might be too optimistic. But some are not as reliable as is often assumed while others paint a more encouraging picture. …
16th July 2019
Lagarde selection strengthens our conviction of ECB rate cuts and QE to come. Trump’s nominations may be less influential, but lend policy a dovish tilt. Next year’s change of guard at the Bank of England could be meaningful. Recent news about a number of …
11th July 2019
The global industrial downturn so far has been fairly broad-based, but cars have fared particularly badly. While some temporary factors have been to blame, the longer-term drivers of the slowdown point to prolonged weakness in the auto sector. Needless to …
10th July 2019
8th July 2019
The past month has brought evidence of a continued slowdown in global growth and this weakness now seems to be spreading to labour markets. While advanced economy employment growth held up very well during the initial stages of the slowdown, it has now …
5th July 2019
The continued broad-based decline in the global manufacturing PMI in June appears to confirm that the industrial malaise worsened in the second quarter . The global manufacturing PMI, published today, fell from 49.8 to 49.4, leaving it consistent with a …
1st July 2019
This report is only available as a PDF. Click to download. … Chief Economist's Note: Checking in on our key calls …
Facebook’s new currency, Libra, could be a significant step forward in reducing the cost of processing international transactions. However, it is very unlikely to become a widely-used global currency. Libra’s unveiling has inevitably invited comparisons …
28th June 2019
Given the recent economic slowdown, new Finance Minister Nirmala Sitharaman is likely to announce more accommodative tax and spending measures when she unveils the union budget for this fiscal year on 5 th July. Ms Sitharaman may choose to paper over the …
It seems likely that Presidents Trump and Xi will agree to another tariff ceasefire on the sidelines of this weekend’s G20 summit in Osaka, Japan. But given the differences between the two sides, we suspect that any truce will prove temporary. The …
27th June 2019
26th June 2019
After rounding off a weak first quarter, world trade volumes fell in April. As the global economy slows further, world trade growth is likely to be sluggish, almost irrespective of developments in the trade war. Data published today by the CPB Netherlands …
25th June 2019
This Briefing is a reference guide with our latest views and forecasts for China’s economy, including the prospects for key macroeconomic and financial market variables such as gross domestic product, wages, the exchange rate and interest rates. … …
PMI surveys for June imply that the slowdown in advanced economies worsened in the second quarter, as growth in the US dropped back towards the weak pace already experienced in the euro-zone and Japan. With price pressures easing too, the surveys support …
This report is only available as a PDF. Click to download. … Chief Economist's Note: Problems in Italy still bubbling under the surface …
Price pressures have weakened further against a backdrop of worsening prospects for the global economy. The recent fall in the oil price implies that energy effects will drag on headline inflation in the advanced economies over the coming months. …
20th June 2019
Global economic growth will slow to its weakest pace since the financial crisis over the next eighteen months. Previous policy tightening has yet to take its full toll on activity in the United States, China’s stimulus seems too modest to prompt a strong …
18th June 2019
Wage growth has strengthened in several advanced economies despite the global economic slowdown. But, outside the UK, we do not expect this to prevent monetary policy loosening. Strong productivity growth has stopped higher wages stoking inflation in the …
Oil prices have fallen close to our end-year forecast and should drag on inflation during the rest of 2019. Admittedly, the risks to our oil price forecast are skewed to the upside. But even a surge in oil prices would have small effects on core inflation …
14th June 2019
The past month has seen a significant change in tone from the world’s major central banks and in expectations of their policies. As fears over trade tensions have mounted and economic data have brought little evidence of the rebound in growth that many …
13th June 2019
We have now incorporated an escalation in the US-China trade war into our global economic forecasts. As it happens, we think that the negative impact on global GDP growth will be relatively contained, so it has not led to a major downward revision to our …
10th June 2019
We have now incorporated a further escalation in the US-China trade war into our baseline forecasts. On its own, this is unlikely to have a major impact on global GDP growth. But combined with previous measures it means that the trade war is likely to …
6th June 2019
The escalation of trade tensions is having much bigger effects on financial markets and oil prices than on real economic performance at the global level. That said, there is clear evidence that global growth has slowed following a solid start to the year. …
The Fed’s conference this week on monetary policy strategy has put central banks’ frameworks back in the spotlight. But even the more radical options being discussed, such as price level targets, are essentially just tweaks to the existing framework. In …
4th June 2019
The direct effects of the trade war on global GDP have so far probably been negligible. The indirect impact, via weaker confidence and investment, has been bigger. But we estimate that even this accounts for just a quarter of the slowdown in global growth …
3rd June 2019