The US economy is the main engine of global growth, posting higher than expected growth in Q1 2019. In China, latest GDP data hints at a stabilisation in activity thanks largely to another sizeable fiscal boost. However, recent downbeat Euro area business surveys point to a continued sub-par performance in early 2019.
Another strong US employment report and improved manufacturing sentiment contrasts with continued lacklustre Euro area growth and a downbeat Chinese PMI survey, highlighting diverging trends in the global economy.
Inflation continues to rise above the 2% target but the Bank of England sees no need to raise rates (yet). That’s the way things will remain for some time, just as long as expectations of future inflation don’t take off, pay growth remains muted and investment and export demand pick up the baton of growth from the consumer. Continue reading
Just when you think it’s cooling, it comes back again. The housing market seems to be regaining a bit of momentum. But it’s not surprising. The UK won’t break its bad habit of not building enough houses. It would do the economy the world of good if it did. Continue reading
Stock markets fell last week, but not all was doom and gloom. Financial clouds can have silver linings too.
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.