Monetary policy, inflation in The Monday Briefing

What happened over the summer?

What_happened_summer_2018

 

The summer months tend to be pretty thin for media coverage of economics and finance. Like the rest of us, journalists take their holidays in July and August. Yet economics is no respecter of holidays and events and data have continued to pile up.

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Posted on 03/09/2018

Turkish lessons

Turkey_crisis

Emerging market economies have been the main losers from US protectionism and higher US interest rates.

 

Capital has flooded out of emerging economies to the US to benefit from rising interest rates. This has meant less liquidity and has sent some emerging economy currencies through the floor. Emerging market governments or businesses which borrowed in dollars, and many have, are having to cope with rising financing costs and a heavier local currency debt burden.

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Posted on 28/08/2018

Equities: From exuberance to caution

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The behaviour of the equity market provides useful signals about where investors think the global economy is heading. As we move into the second half of 2018 here’s our mid-year assessment of what equity markets are telling us.

 

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Posted on 16/07/2018

Emerging markets and the end of cheap money

Shutterstock_131733137_lo

 

There’s never a shortage of things that could go wrong with the global economy. One that’s joined the list in recent months is worries about the health of some emerging market (EM) economies. In a sign of unease nervous investors have been pulling money out of EM equity and bond funds. What’s happening and why does this matter for the rest of the world?

 

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Posted on 25/06/2018

UK update

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UK activity has softened since the vote to leave the EU.  The UK slowdown has been pronounced, though less severe than widely predicted on the eve of the referendum, and has left the UK slowing into a global recovery.

 

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Posted on 18/06/2018

Italian lessons

Colosseum_Rome_Italy
A week ago, we seemed to be on the verge of a second euro crisis with a populist mood threatening to sweep Italy out of the single currency. By the end of the week a coalition government was in place, the markets had cheered up and the newspapers were worrying about other things.

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Posted on 04/06/2018

300 years of public spending

Public spending
The changing size of the state tells the story of modern nations and the ideas that shape them.

Until the late nineteenth century the civilian state scarcely existed. In 1692, when comprehensive records for what was to become the UK started, civil spending by government came to a modern equivalent of around £90 million. A country that was about to acquire a vast empire was governed with a budget equivalent to that of today’s Food Standards Agency.

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Posted on 29/05/2018

Rising wealth, sluggish wages

The City_London
In the last decade Britain and the US have experienced an unusual combination of soaring asset prices and sluggish wage growth.

Between 2006 and 2016, the total value of assets held by UK households rose by 59% while average incomes increased by just 24%.

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Posted on 21/05/2018

Nine things you (may) not know about international trade

Two lorries on the road
1. Trade liberalisation boomed and has busted

A post-World War II wave of liberalisation reduced barriers to trade and helped fuel a global boom in exports. The Uruguay Round of negotiations between 1986 and 1994 marked the high point of this process. It was the largest ever trade negotiation and significantly reduced barriers to trade in goods. Since the 1990s the momentum of trade liberalisation has slowed, and since the financial crisis, almost ground to a halt. The election of Mr Trump, an ardent critic of the international trading order, is indicative of how much things have changed.

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Posted on 08/05/2018

Thoughts on the global economy

Abstract metal sphere
Last month Deloitte’s economists from across the world met in London to assess the outlook for the global economy. It was a fascinating and wide-ranging discussion. Rather than trying to summarise individual views, here are some of the areas where the discussions affected my own thinking.

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Posted on 01/05/2018