Political threats could hit fragile global growth August 18, 2016 The global economy is in danger of being blown off course by any number of political risks stalking both advanced and emerging markets, Moody’s warned today. In its quarterly economic outlook, analysts said they expected growth to be stable, if unspectacular, over the next two years, but highlighted a cocktail of threats or "downside risks" – from the [...]
US Federal Reserve minutes contain hawkish undertones August 17, 2016 The minutes from the US Federal Reserve's meeting on 26-27 July showed growing support for an interest rate rise. An unnamed individual agreed with the Federal Open Market Committee member who voted to increase borrowing costs at the meeting. "Given their economic outlook, they judged that another increase in the federal funds rate was or would soon be warranted, with a [...]
Japanese officials hit the brakes on yen rally August 17, 2016 The Japanese yen has eased back today after a top government official threatened direct intervention if the currency continued to strengthen. The yen broke below ¥100 against the US dollar yesterday as investors continued to flock to the currency, seen as a safe haven because of Japan's low inflation. The dramatic rally over the last [...]
The Office for National Statistics has put together an economists supergroup to avoid dodgy data August 17, 2016 The Office for National Statistics (ONS) has beefed up its research team with the appointment of a new expert panel of economists – a supergroup, if you will – as it seeks to respond to a string of criticism. Former Bank of England rate-setter Martin Weale, who has just left the monetary policy committee (MPC) after a [...]
Household income surpasses pre-crisis levels – but not for those in work August 17, 2016 Disposable incomes have finally reached their pre-crisis high after a seven-year battle to recover from the recession. UK households had an average of £26,400 to spend in the last financial year, according to the Office for National Statistics (ONS), up 2.7 per cent on the year before and back above the £26,000 level reached in 2007/08. The [...]
Norway’s sovereign wealth fund worried about Brexit uncertainty August 17, 2016 Norway's sovereign wealth fund rode out market turbulence in the second quarter to boost its holdings by an extra £8bn. The world's largest fund of its kind clocked a return of 1.3 per cent – just shy of the market average – as it highlighted "sharp" volatility as a result of the UK's Brexit referendum. With [...]
With inflation expected to hit 3 per cent in 2017, is the Bank of England right to prioritise growth over price stability? August 16, 2016 Martin Beck, senior economic adviser to the EY Item Club, says Yes. In light of the sharp post-referendum drop in the value of the pound, prices of imported goods are set to increase. As a result, inflation will rise over the next year. As our forecast suggests, CPI inflation is expected to peak at around 3 [...]
No problems for the Old Lady as Carney snaps up government bonds in QE programme August 16, 2016 The Bank of England's quantitative easing programme went off without a hitch this afternoon, allaying fears Threadneedle Street may need to change tact. In the Bank's second round of buying super-long-term government bonds, investors offered to sell £3.1bn to the Bank – 2.67 times the amount it needed to buy. Last week, the Bank fell [...]
US Federal Reserve frozen by weak US inflation as price rises slip back August 16, 2016 Inflation slipped back in the US economy in July, further easing the pressure on the US Federal Reserve to hike interest rates. The consumer prices index (CPI) came in at 0.8 per cent in July, on a non-seasonally adjusted basis, in figures released by the US Bureau of Labor Statistics this afternoon. That was down from [...]
Downgrades outpace upgrades by three-to-one in the sovereign credit ratings game August 16, 2016 Governments across the world are becoming riskier to lend to, according to an analysis of sovereign credit ratings. Research by IHS Global has shown the number of downgrades outpaced upgrades by a ratio of three-to-one in the second quarter of the year, as low commodities prices hurt emerging markets and Brexit led to the UK [...]