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While they disagree on many things, the UK’s Labour and Conservative parties seem to favour an expansion in the state – though to very differing degrees.
Both are committed to increasing public expenditure, particularly on health and infrastructure. The Resolution Foundation estimated earlier this month that under either of the major parties UK public expenditure will increase by the end of the next Parliament to levels last seen persistently in the 1970s.
According to the Resolution Foundation the Conservative’s plan would see spending rise from around 40.0% today to 41.3% of GDP by 2023-24. Under Labour’s far more ambitious plans spending would rise to 43.3% of GDP.
Last week US equities hit new highs on hopes that China and the US would reach an agreement in their 18-month trade dispute. Financial markets think a deal would reduce uncertainty, boosting investment and growth.
This time last year central banks in the rich world were poised to tighten monetary policy. The US Federal Reserve was expected to continue raising interest rates and the European Central Bank (ECB) president Mario Draghi had announced the end of its programme of quantitative easing.
The car industry is a bellwether of the global economy. When global trade and growth boom so, too, do car sales. With growth slowing and globalisation under pressure, the auto industry is suffering. Car production and sales are falling across most of the rich world and in China and India. The downturn in the sector is the most pronounced since the global financial crisis.
Last week data showed that the number of people in employment in the UK has fallen by 56,000. Long the standout success in Britain’s recovery the jobs market is feeling the chill winds of weaker growth. Brexit has played a role, but weakening UK activity is small part of a wider, global story.
Globalisation has been one of the defining features of the modern era. It has been marked by the movement of goods, services, ideas, capital and people through a plethora of cross-border networks.
This morning we are launching our third quarter “Global economy in charts” report, available here – https://blogs.deloitte.co.uk/mondaybriefing/2019/09
Created by my colleague Debo, the report examines the big global macro trends and challenges. Charts can be cut and pasted into your own presentations and reports. Do drop Debo a line at firstname.lastname@example.org with ideas and comments.
On Friday, millions of people around the world joined climate change protests. Earlier in the week, Bill Gates, the Microsoft co-founder and philanthropist, warned climate change campaigners that divesting, or refusing to hold, fossil fuel stocks, such as oil companies, was a waste of time. “Divestment, to date, probably has reduced about zero tonnes of emissions. It’s not like you’ve capital-starved [the] people making steel and gasoline.”
Jobs markets are barometers of social change. In the last 30 years much of the growth in employment in the West has been driven by women and foreign-born workers. Employment rates for men have declined. In the US in the early 1950s around 90% of men of working age were in work or searching for a job; today, with America’s unemployment rate close to record lows, just over 70% of men are working. Explanations range from the loss of traditionally ‘male’ jobs to diminishing returns to unskilled labour, the competing appeal of computer gaming and the role of women, parents and the government in supporting male incomes.