Deficits, debt in The Monday Briefing

Who made money in 2019?

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2019 was a good year for financial markets and investors, with global equities up 27% over the course of the year. All major asset classes ended 2019 up on the year and risk assets were clear outperformers.

Global stocks rallied through most of last year, punctuated by short-lived sell-offs driven by rising trade tensions in May and worries about US growth in August. Risk assets largely shrugged off geopolitical concerns around the Middle East, Russian interference in foreign elections and growing US-China discord.

Equities were supported by unexpected monetary easing by the US Federal Reserve and the European Central Bank (ECB) designed to bolster growth. At the end of 2018, financial markets had expected the Fed to raise interest rates and the ECB to end its programme of quantitative easing in 2019. Instead, the Fed made three 25bps rate cuts and the ECB reduced interest rates and eased monetary conditions.

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Posted on 20/01/2020

What happened over the Christmas holidays

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This week’s briefing looks at some of the big economic events of the last month or so. As a result we have dropped our usual news section this week. We will release our full year-ahead view for the UK and global economies next Monday, 13 January.

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Posted on 06/01/2020

Thoughts on the UK general election

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Boris Johnson’s 80-seat parliamentary majority has transformed the UK political scene. What does it mean for business and the economy? As always what follows is a personal view.

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Posted on 16/12/2019

What to read this Christmas

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We are publishing our annual Christmas reading list today. It aims to offer a thought-provoking break from the rigours of Christmas. All are available free and online. You can save these articles on your smartphone's or tablet's reading list. To print any use the print icons, where available, on the webpages to ensure the whole article comes out.

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Posted on 09/12/2019

Christmas Quiz

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Our Christmas quiz offers an eclectic test of knowledge of economics and business. The answers and a brief explanation of the factors at work are at the end of this note.

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Posted on 02/12/2019

What’s the purpose of a company?

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Expectations of business change over time. The tax and regulatory environment shift with the political cycle. Society’s expectations change too, and in recent years they have risen.

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Posted on 25/11/2019

The size of the UK state

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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.

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Posted on 18/11/2019

A China-US trade deal won’t end protectionism

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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.

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Posted on 11/11/2019

A bumpy road for the auto industry

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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.

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Posted on 28/10/2019

Hard landing risks rising

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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.

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Posted on 21/10/2019