A sharp slowdown in economic activity adds to calls for the Bank of England to pause before raising interest rates.
While two of the SpaceX rocket boosters landed gently back on terra firma it was a much more turbulent period in the markets. US equities had their worst week in two years and volatility woke from its slumber. The Bank of England also gave the markets a little shake, indicating a rate hike in May is more likely than previously expected. Continue reading
Over two months have passed since the UK voted to leave the EU. Since then, the media and economists have focussed on the incoming economic data to assess the impact. Continue reading
The first full post-referendum week was nothing if not eventful. Financial markets were volatile and uncertainty about economic policy has jumped. We await tomorrow’s publication of the Financial Stability Report and yet another opportunity for the Bank of England’s policy makers to offer their views. Continue reading
The UK was sending out some mixed signals on growth last week as manufacturing and construction went in different directions. The best news came from the Eurozone, for a change, whilst the Fed continues to wait.
Global growth is slowing. The latest PMI survey says that it was at an almost 4-year low in February. The Chinese Authorities have already taken action and the European Central Bank is expected to do more soon. It is perhaps little surprise that the talk of negative interest rates is spreading to these shores. Continue reading
There is an increasingly unpopular drama unfolding in the global economy. It’s not quite the epic of 2007/8. But it certainly has economists and investors gripped, as we have witnessed the Big Short on oil prices and a Revenant-style bear market that has mauled the share prices of the stock markets’ biggest stars. Continue reading
The economic backdrop to the annual World Economic Forum last week was peppered with disappointing data. China is slowing and there is little sign of a pick-up in growth in the Eurozone. The one silver lining was the UK labour market, with employment hitting a record high. No sign of Davos’ job-stealing robots there, then.
Recent oil price falls partly reflect a malaise in the world economy: weak demand. And with disappointing data from the US, the UK and the Euro Area, market expectations of interest rate rises in the near future are fading.
The Federal Open Market Committee has convinced pretty well everyone that it will raise the Fed Funds Target Rate when it meets on Tuesday and Wednesday. A first rise since June 2006 would be cause for modest celebration, signalling as it would that the need for extraordinary monetary policy is beginning to pass, if not quite yet a return to normality.