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Monetary conditions in the major advanced economies have remained exceptionally loose even as the Federal Reserve prepares to scale back QE3. … Fed poised to begin …
3rd September 2013
Investors have long ago learnt to expect little of substance to emerge from the formal meetings of G20 leaders and finance ministers. The group is too large and disparate to function as an effective decision-making body and it has no means of enforcing …
2nd September 2013
We expect the Fed to begin to scale back its monetary stimulus in September, but the tapering process will be slow and US interest rates will remain low for an extended period. Moreover, central banks in other advanced economies are likely to loosen …
30th August 2013
The recent events in Syria are, above all, a human tragedy, but it falls on us to address the wider market and economic implications too. A further rise in oil prices would threaten to turn a lacklustre global recovery into something approaching …
28th August 2013
The recent sell-off in emerging market assets should have limited impact on the global economy. Growth in the emerging world itself may not decelerate much further than it has done already; and experience suggests that even major emerging market crises …
27th August 2013
The latest aggregate data show that world trade remained subdued in both June and July. Forward-looking surveys suggest a small rise in the coming months, but overall there is little reason to expect trade volumes to pick up sharply. … Global trade …
23rd August 2013
The continued high level of spare capacity and absence of big commodity price movements suggest that inflation in advanced economies is likely to remain low and stable in the coming months. This should give a green light for central banks to follow the …
16th August 2013
Only a small part of the recent run-up in oil prices is due to the turmoil in Egypt. But whatever the reason for the latest jump in the cost of crude, the fragility of the global economic recovery and of financial market sentiment means that prices are …
15th August 2013
This week’s GDP releases confirm that global growth was stronger in Q2 than in Q1. However, growth at current rates will leave a lot of spare capacity and daunting debt burdens in many countries. … End of euro-zone recession lifts global …
14th August 2013
Changes in the rates of growth of emerging and advanced economies have prompted some commentators to suggest that advanced economies may soon return to being the main engine of global growth. But even a cursory look at the numbers suggests that this is …
13th August 2013
The latest business surveys suggest that the recoveries in most advanced economies are gaining momentum and that the euro-zone may be edging its way out of recession. But these positive developments are being offset by continued weakness in the major …
2nd August 2013
In most advanced western economies the supply of labour is likely to be boosted by a rise in labour market participation during the coming year or two. This should help to prevent wage inflation picking up and thereby support the case for continued loose …
31st July 2013
Some form of ‘‘forward guidance’’ is already being used by many central banks, including the Federal Reserve and the Bank of Canada. In the coming weeks, the Bank of England looks set to join them, and even the European Central Bank may eventually move …
29th July 2013
The latest data show that world trade was lacklustre in both May and June, and surveys suggest that there will not be a big improvement any time soon. Meanwhile, the major regional trade negotiations now underway may take years to bear fruit. … World …
25th July 2013
Preliminary manufacturing PMIs for July, released by Markit today, reveal that the slowdown in Chinese manufacturing is offsetting better news from the euro-zone, where activity may finally be stabilising. Meanwhile, the Markit manufacturing PMI for the …
24th July 2013
Over the past twelve months or so, policy-makers have sounded more pragmatic about the need for further fiscal austerity. However, the reduction in the structural budget deficit in advanced economies as a whole will still be larger this year than in the …
23rd July 2013
Monetary conditions in the major advanced economies are likely to remain exceptionally loose even after the Fed ends its asset purchases under QE3. Credit growth in the US is slowing, but remains relatively strong, while there are tentative signs of a …
22nd July 2013
The main talking point at this weekend’s gathering of G20 finance ministers and central bank governors is sure to be the Fed’s plan to taper QE3. But despite the volatility which has hit their markets recently, governments in emerging economies can have …
17th July 2013
The recent rise in oil prices is not large enough to be a significant drag on global growth, particularly given that Brent crude has increased much less than WTI. However, if prices rise much further, this would threaten our forecast that world GDP growth …
15th July 2013
The world economy is likely to grow at a moderate pace this year and next. The US should be able to withstand a gradual withdrawal of stimulus by the Fed, and Japan is on track for steady growth, helped by its central bank. However, we expect the …
9th July 2013
Negotiations between the US and EU on a transatlantic trade and investment agreement begin today. In the long run, an agreement could provide a significant boost to world trade and economic activity. However, the few products for which tariffs are high …
8th July 2013
European and Japanese activity indicators improved further in June. However, stronger activity in these economies is being offset by a loss of momentum in the US and a significant slowdown in China, where the authorities have signalled that they are …
4th July 2013
The latest set of PMIs point to an improvement in manufacturing conditions in Europe and Japan but a deterioration in China, leaving global growth little changed overall. … Global manufacturing treads water in …
1st July 2013
The latest data show that world trade growth was pretty weak in both April and May. Forward-looking indicators give a mixed picture, but overall there is little reason to expect trade volumes to pick up sharply. As a result, 2013 looks likely to be the …
26th June 2013
The recent sharp rise in government bond yields in the developed world has raised fears that the global economic recovery could be derailed by the deterioration in financial conditions. We think these fears are misplaced, or at least premature. … Will …
25th June 2013
Government and corporate bond yields in most advanced economies increased sharply in the past few weeks in response to statements by the Fed which suggested that it will scale back its asset purchases under QE3 later this year and halt them completely in …
The so-called “flash” PMIs for the US, euro-zone and China – economies which together account for nearly half of world GDP – give us an early indication of how the global economy is performing in June. These surveys, which were published by Markit today, …
20th June 2013
The prospect that the US Fed may start to taper its asset purchases later this year has raised concerns that the era of “cheap money” may soon be ending, undermining global asset prices and economic activity. However, there are four good reasons to take a …
17th June 2013
Average inflation in advanced economies fell to only 1.3% in April, its lowest rate since late 2009. Moreover, recent commodity price movements suggest that it will fall further during the coming months, and we expect inflation to stay low in most …
13th June 2013
The past month has brought some slightly better news about the world economy. In particular, there is further evidence that the pace of contraction in the euro-zone has slowed, relative to late last year, and that economic recovery has continued in Japan …
6th June 2013
Purchasing managers’ surveys for May suggest that conditions improved in Japan and the UK and that the deterioration in the euro-zone is not as steep as it was a few months ago. But these improvements have been partially offset by weaker growth in China …
5th June 2013
The 25% year-on-year rise in equity prices in advanced economies, combined with rising property prices in some countries, should provide a boost to household consumption. However, we suspect the benefit will be small in most cases, with the notable …
4th June 2013
Preliminary PMIs for May, published by Markit today, suggest that global growth remains subdued. In particular, Chinese manufacturing activity may have slowed further, and the recession in the euro-zone appears to be dragging on for a seventh successive …
23rd May 2013
Advanced economies remain awash with liquidity. The Japanese monetary base has been rising steeply for several months, even before the Bank of Japan’s policy shift, announced on 4th April. … Global Monetary Indicators …
21st May 2013
World GDP growth picked up in the first quarter, after a very weak end to 2012. But it looks unlikely to accelerate further given the extended euro-zone recession and slowdown in emerging economies. … Global growth picked up in Q1, but outlook …
16th May 2013
Weak commodity prices and a faltering global recovery suggest that inflation in advanced economies is likely to remain very low for the foreseeable future. This will support the case for continued ultra-loose monetary policy in the US and Japan, and for …
9th May 2013
Signs that global growth was picking up early this year have faded during the spring. Survey data for April confirm that there has been a slowdown in the US, where the fiscal squeeze is taking a toll, and that the Chinese authorities’ stimulus efforts …
8th May 2013
April’s business surveys suggest that global growth is faltering again. With continued fiscal austerity only partly offset by looser monetary policy, we doubt that it will accelerate in the coming months. … Global manufacturing prospects still …
2nd May 2013
Japan’s adoption of a far more aggressive monetary policy stance early this month has left the ECB looking increasingly out of step with its peers. … Global Monetary Indicators …
26th April 2013
Other than for some commodity exporters, the negative impact of lower growth in China on activity elsewhere should be fairly limited. What’s more, there are some offsetting positives including lower commodity prices and the reduced risk of a “hard …
The exposure of errors in Reinhart and Rogoff’s paper on debt and growth does not affect our view that fiscal austerity will be a major drag on growth for some years to come, particularly in advanced economies. In principle, the affair provides some …
22nd April 2013
The global economy is likely to grow at only a moderate pace this year and the divergences between regions are set to widen further. The US should resume its steady recovery but there is little evidence of a sustained upturn in growth in the euro-zone or …
18th April 2013
The recent declines in the prices of US grains and oilseeds have received much less media attention than the surge last summer, but they have now reversed most of those gains. Admittedly, the prices of other key global foodstuffs have been relatively …
11th April 2013
Global growth appears to have picked up a bit in the first quarter of the year, but only relative to an exceptionally weak end to 2012. The recovery remains fragile and unbalanced. … Recovery still looking …
4th April 2013
The latest business surveys suggest that global manufacturing activity remained fairly weak in March, while that the gulf between US and other advanced economies remains huge. … Global manufacturing still …
2nd April 2013
The paths of narrow money in the US and euro-zone diverged further over the past few weeks. The Fed maintained the pace of its assets purchases. But in the eurozone, commercial banks continued repaying loans from the ECB, resulting in a contraction in the …
28th March 2013
Figures published today show a pick-up in world trade in January. But the growth rate remains slow by pre-crisis standards, and in many areas trade is still contracting. … World trade still …
25th March 2013
Recent and prospective changes in the conduct of monetary policy suggest that policymakers may be willing to take slightly greater risks with inflation than they were previously. But we expect inflation to stay at historically low levels, at least for the …
22nd March 2013
Preliminary purchasing managers’ surveys for March indicate that the recession in the euro-zone has deepened once more, while the recovery in the US has strengthened. There was a small rise in China’s manufacturing PMI, but this has to be weighed against …
21st March 2013
The $10 decline in the price of a barrel of Brent since early February reflects the faltering in the world economy and, most recently, the fresh worries about the euro-zone triggered by the crisis in Cyprus. But at around $110, Brent is still well above …
19th March 2013
