Global economics in The Monday Briefing

Deloitte CFO Survey: The dash for cash

Deloitte-uk-survey-account

Today’s Briefing summarises the findings of the latest Deloitte Survey of Chief Financial Officers which was released overnight. The full report is available at: https://www2.deloitte.com/uk/en/pages/finance/articles/deloitte-cfo-survey.html

The survey gauges sentiment among the UK’s largest businesses in the wake of Parliament’s rejection of Mrs May’s Brexit deal. The survey ran between 26 March and 7 April, opening just after the announcement of the first delay in Brexit and covering a period that saw the failure of the House of Commons to agree a new plan and the start of Brexit talks between the government and the Labour Party.

Despite such turbulence the latest survey shows that confidence and risk appetite among CFOs are little changed. CFOs seem to have priced in a tougher environment earlier, at the start of the year, and the latest round of Brexit uncertainties has not materially changed that picture. The fact that balance sheets are being readied for turbulence fits with findings by the Bank of England’s agents which show that around 80% of companies judge themselves ready for a no-deal, no transition Brexit.

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Posted on 15/04/2019

Who’s afraid of the yield curve?

1 cent

There’s no doubt that growth in the West is slowing. The question is whether the slowdown could turn into a recession. Last month the US yield curve, a key gauge of future US growth, temporarily dipped into recessionary territory for the first time in ten years.

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Posted on 08/04/2019

Navigating the China slowdown

Chinese-coin

China’s economic transformation in the last four decades is one of the great economic success stories of modern history. Through liberalisation and opening up to trade China was able to grow by 10% a year between 1980 and 2018. Its economy expanded by a factor of 30 and it easily dodged recession during the global financial crisis. There is no precedent in history for an economy of this size growing at such a rate for so long.

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Posted on 01/04/2019

Globalisation déjà vu

Compass

This morning we are launching our quarterly “Global Economy in Charts” report, a 20-page slide deck, available here. Created by my colleague Debo, the report examines the big global macro trends and challenges. Charts can be cut and pasted into your own reports. Do drop Debo a line at dde@deloitte.co.uk with ideas and comments.

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Posted on 25/03/2019

Global Economy in Charts

Download the charts in pdf format here
Download the charts in powerpoint via SlideShare here

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Posted on 25/03/2019

Alarm bells ring for the euro area

Alarm

We were taken by surprise last week by the scale of the downgrade to the OECD’s latest forecast for German growth. The OECD now thinks that the German economy will grow by just 0.7% in 2019. This is a big reversal of fortune; a year ago the thinking among economists was that Germany would grow by around 2.0%. At 0.7% German growth would be slower than the euro area as a whole (1.0%) and even the Brexit-embattled UK (0.8%).

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Posted on 11/03/2019

How to spot a bubble

Deloitte-uk-how-to-spot-a-bubble

Last October the International Monetary Fund warned of the risk of another global financial crisis. The Fund sees a 60% rise in global indebtedness in the last ten years and the exposure of banks to illiquid assets as major risks.

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Posted on 04/03/2019

The UK consumer

Shopping-bags

2018 was a tough year for British retailers. According to the Centre for Retail Research, nearly 2,600 stores closed, the highest number since 2012. Recent high-profile casualties included HMV, Patisserie Valerie and Oddbins. Along with the structural shift to online shopping, high-street retailers are under pressure from a slowdown in consumer spending growth.

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Posted on 25/02/2019

Contingency thinking for the next downturn

Equity

After a dreadful end to the year global equity markets got off to a flying start in 2019. The US S&P 500 index is up by 10% so far this year, having fallen by 16% in the first three weeks of December.

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Posted on 18/02/2019

How to reboot growth

Japan

The financial crisis of 2008-09 pitched Western economies on to a lower growth path. In recent years growth across the industrialised world has run well below the rates seen in the years before the financial crisis.

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Posted on 11/02/2019