There is no sign that the synchronised upturn in the world economy is running out of steam. The two hurricanes which hit the US in the past couple of months should have only a short-lived impact on the economy while the latest business surveys suggest that activity in the euro-zone, Japan and China remains strong. At the same time, wage and price inflation has generally been subdued.
The tide is turning towards slightly less accommodative monetary policy. The Fed has now started reducing the size of its balance sheet and we expect the ECB to set out its plans to taper its asset purchases later this month and the Bank of England to raise rates in November. Indeed, financial markets have moved to price in rate hikes in the UK and US.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services