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Business surveys published today suggest that the euro-zone recovery gained momentum in January, while China's manufacturing slowdown has continued. … Euro-zone recovery offset by slowdown in …
23rd January 2014
The volume of world trade rose marginally in November and surveys suggest that it may have accelerated since then. Nonetheless, the pace of growth continues to lag significantly behind its pre-crisis rate. … World trade growth recovering …
22nd January 2014
Fears that yen weakness will trigger a surge of cheap Japanese exports and hence raise the risks of deflation elsewhere have, so far at least, proved wide of the mark. In practice, Japan’s firms have left their contract prices broadly unchanged and chosen …
We expect ample supply to result in large falls in global oil prices in the next few years. At the same time, the prices of other key commodities, including industrial metals and agriculturals, are likely to remain subdued. This may well be a benign …
21st January 2014
Recent trends in corporate credit growth underline the diverging fortunes of advanced economies. In the US, bank lending is expanding at a decent pace, albeit more slowly than it was in 2012, and even in Japan it has gradually accelerated. However, bank …
20th January 2014
We expect global growth to pick up gradually during the coming two years as private sector spending accelerates and fiscal austerity eases. Among advanced economies, the US will lead the recovery, whereas the euro-zone faces a period of stagnation. …
17th January 2014
Some commentators have suggested that the global business cycle is now quite advanced and that markets should expect much tighter monetary policy as soon as 2015. We disagree. … World economy still has plenty of spare …
14th January 2014
The world economy has entered 2014 with a lot more momentum than it had a year ago. Business and consumer confidence have improved and unemployment is falling rapidly in several countries. However, while this should eventually prompt central bankers to …
10th January 2014
The world economy ended last year on a strong note, led by an upturn in manufacturing output in advanced economies. The pick-up in activity is feeding through to labour markets in many countries, notably the US and UK, in both of which the unemployment …
8th January 2014
Business surveys for December suggest that the world economy continued to grow at a solid pace at the end of 2013. We expect this to be sustained throughout most of this year. However, as there is little threat of inflation, central banks are likely to …
6th January 2014
The volume of world trade rose in October and surveys suggest that it may have accelerated further since then. But the recovery in trade volumes continues to lag behind the pick-up in economic activity and we doubt that international trade is about to …
20th December 2013
Austerity will be a drag on growth in advanced economies next year, but the squeeze should be smaller than this year. Moreover, the risks of further fiscal tightening have fallen since US politicians have struck a deal on the federal budget and Japan has …
18th December 2013
The world economy has gained momentum during the past twelve months, but the latest evidence, including several business surveys published today, suggests that it may no longer be accelerating. … December business surveys suggest growth levelling …
16th December 2013
Ample spare capacity and further falls in commodity prices should contain price pressures for the foreseeable future, even in those countries which are now experiencing a strong recovery. Meanwhile, several euro-zone countries are at risk of a period of …
13th December 2013
The deal signed in Bali this weekend was reached only after the bulk of the Doha trade agenda was dropped from the negotiations. We doubt that it will make much difference to world trade volumes and nor do we think it signals a renaissance for …
9th December 2013
Judging by the latest business surveys, activity in advanced economies has strengthened further. The global manufacturing PMI is now consistent on past form with world GDP growth of as much as 4%. Activity has picked up most in the US and UK, and although …
6th December 2013
Our measure of the aggregate monetary base in advanced economies has expanded rapidly during the past few months as both the Federal Reserve and the Bank of Japan have pressed on with their asset purchase programmes. … Monetary expansion …
3rd December 2013
Business surveys published today suggest that the manufacturing recovery strengthened further in November, led by the US, UK and Japan. The euro-zone, however, is largely missing out, and there are signs that the rebound in China is running out of steam. …
2nd December 2013
Recent changes in the conduct of monetary policy have prompted some to argue that the era of inflation targeting is passing. Some central banks have put more emphasis on the labour market than was previously the case and appear more willing to tolerate a …
28th November 2013
The volume of world trade rose in September and surveys suggest that it should rise further over the next few months. However, the growth of international trade is still lacklustre compared to the growth of output. Meanwhile, it is unclear whether a trade …
25th November 2013
Although the global recovery seems to be gradually gaining momentum, led by faster growth in the US, preliminary business surveys for November underline how uneven growth is. In particular, China’s summer rebound seems to be fading and the euro-zone is …
21st November 2013
Globalisation appears to have stalled since 2008, even as the world economy has recovered. This suggests that structural changes have reduced the incentives for closer integration. With little prospect of a new wave of liberalisation, the pace of …
18th November 2013
We estimate that world GDP growth accelerated in the third quarter, mainly thanks to a summer rebound in China and faster growth in the US and UK. Looking ahead, global growth may slow a bit as emerging economies continue to struggle and the euro-zone …
14th November 2013
Many commentators have attributed the sequence of crises in emerging markets since the 1980s and the global financial crisis of 2008/09 at least partly to shortcomings of the international monetary system. Yet calls for reform have fallen on stony ground. …
Despite the recent improvement in the UK labour market, the Bank of England (BoE) is likely to lag behind the US Fed in raising interest rates. Over time, this should put renewed downward pressure on sterling against the dollar and on gilt yields relative …
13th November 2013
Global growth appears to have accelerated in October, as suggested by the rise in business surveys to their highest levels since early 2011. After accelerating in Q3, the US economy seems to have largely shrugged off October's fiscal crisis. Activity has …
7th November 2013
We do not think the world as a whole is heading for a period of deflation. However, peripheral eurozone countries may experience an extended period of falling, or at best stable, prices. We also suspect that underlying inflation will remain close to zero …
5th November 2013
With the Fed likely to keep the monetary taps flowing for even longer than previously expected, the world will be awash with liquidity for a long time to come. There are tentative signs that this is feeding through to faster growth of broader measures of …
31st October 2013
The realisation that the Fed is likely to go on buying assets at its current pace for longer than previously anticipated has once again focused attention on the costs of QE. The more apocalyptic warnings of hyperinflation, or the re-emergence of massive …
29th October 2013
The pick-up in world trade in July was not sustained in August as exports from emerging economies continued to be weak. What's more, data already published for September suggest that trade may have slowed further. … Global trade volumes fall back in …
24th October 2013
Disappointing preliminary business surveys for October suggest that the improvement in business conditions seen over the past few months may be beginning to tail off. … Recovery in global manufacturing falters in …
Since May this year, when US bond yields started to rise, market participants have been concerned about the implications for the global recovery of the Fed scaling back its policy support. In our view, these concerns are overdone. Monetary policy in …
22nd October 2013
If the political fight over the US debt ceiling goes to the wire, or beyond, there will be negative implications for the US economy. But the impact on the rest of the world should be fairly small. … US debt crisis should not stifle global …
16th October 2013
Global growth is likely to accelerate gradually next year as activity in the US gathers pace and the euro-zone's fragile recovery continues. Among the emerging economies, growth in China may slow further but activity should pick up steam in some other …
15th October 2013
Clearly, the fiscal issues dominating the news at present are the US government shutdown and threat of default. We discuss the recent trends in the US and other advanced economies on pages 3- 4. But assuming that the US avoids the worst, a key question …
10th October 2013
Headlines from the IMF meetings in Washington this week will be dominated by warnings of theconsequences of the US government defaulting on its debts and the US central bank exiting prematurelyfrom QE. However, in many respects both the US and world …
9th October 2013
The markets are right to be concerned about the wider implications if the US Federal government is unable to service its debts. This would be uncharted territory and no-one can be sure exactly how events would pan out. Nonetheless, provided any default …
8th October 2013
There was further evidence over the past month that the world is experiencing a steady recovery, led by stronger growth in many advanced economies. Admittedly, the global business surveys for September dropped a little compared to August, but they are …
4th October 2013
Final business surveys for September, published by Markit this week, suggest that global manufacturinggrowth may have accelerated a bit relative to August. But steady global growth masks significant variations, as the recovery in the euro-zone and the …
1st October 2013
Both the Federal Reserve and the Bank of Japan are likely to continue with quantitative easing for many months to come, even after the Fed has begun scaling back its monthly asset purchases. With policy rates set to stay near zero in all major advanced …
On their own, the increases in government bond yields since May do not pose a significant threat to the public finances of most advanced economies. Higher yields in the secondary market take a long time to feed through to debt service costs. What’s more, …
26th September 2013
World trade growth picked up a bit in July and the forward-looking surveys suggest that this strength may be sustained in the coming months. However, there is little reason to expect trade growth to return to its pre-crisis rates any time soon. … World …
25th September 2013
Preliminary PMIs, published by Markit today, suggest that the economic recoveries in China and the euro-zone gained more momentum in September. The survey for the US dipped a bit, but this does not alter our view that the US probably grew by around 2½% …
23rd September 2013
It’s going a bit far to claim that the Fed has lost all credibility simply because most in the markets were surprised by its decision not to begin winding down its asset purchase programme this month. Nonetheless, the communication difficulties which both …
Applying a simple Taylor rule to our economic forecasts suggests that the Federal Reserve is the only major central bank which should tighten monetary policy (or scale back its stimulus) before 2016. In contrast, the rule suggests that the ECB and Bank of …
19th September 2013
Business cycles in advanced economies have been exceptionally closely aligned in recent years because of the global financial crisis, but they are likely to become less so in future. Although a global recovery is now under way, we doubt that the rising …
17th September 2013
Although the global economy appears to be strengthening, we think the unemployment rate in most advanced countries is likely to fall only gradually. This is because there is a lot of scope for a rebound in productivity, for labour market participation to …
13th September 2013
Inflation in most advanced economies is likely to remain at or below target for at least the next two years. GDP has accelerated in many countries, and has stabilised in the euro-zone, but it will be several years before unemployment falls to levels …
11th September 2013
The business surveys for August suggest that the global recovery, which accelerated in the second quarter, may have strengthened further in Q3. However, there is still plenty of spare capacity around the world. This will encourage other major central …
6th September 2013
Business surveys point to a pick-up in global manufacturing activity in August. But while the recovery may gain further momentum in the coming months, it faces several headwinds, notably the structural slowdown in the major emerging economies and chronic …
3rd September 2013
