The country has initiated several tough policy actions and launched its Common Prosperity program to tackle the main threats to both growth and internal stability. However, the jury is still out on whether these measures will prove effective. As the country’s influence extends far past its borders, we have been taking a neutral stance on both Chinese and emerging market … [Read more...] about China flexes its policy muscles – but can they still do the heavy lifting?
Moderate GDP, Persistent Inflation 20 December 2021 From 30,000 feet, the COVID lockdown and re-opening played out pretty much like we thought. GDP collapsed in the first half of 2020, then exploded in the third quarter, followed by strong, but erratic, quarterly growth ever since. The fourth quarter data, when it’s released in January, will show 2021 had the fastest GDP … [Read more...] about 2022: Moderate GDP, Persistent Inflation
The Bank of England (BoE) has once again surprised financial markets, though this time by raising the policy interest rate from 0.1% to 0.25%. As a result, sterling has risen 0.6% against the US dollar, and 0.25% against the euro. The FTSE 100 has fallen back compared to just before the announcement, but remains up on the day, and the benchmark 10-year gilt yield has risen … [Read more...] about Bank of England raises interest rate despite Omicron
The Bank of England (BoE) has been warning for some time that it may need to raise interest rates sooner rather than later. At the November policy setting meeting, only two of the nine-member committee backed a rise, surprising and probably disappointing many investors. Our view at the time was that it was too soon to raise rates, as considerable risks remained around the … [Read more...] about Why UK interest rates now look set to rise in December
The European Central Bank held its penultimate monetary policy meeting of the year on Thursday, October 28. There were no major new developments, with the last meeting of the year in December more likely to see the announcement of more policy shifts, if any. However, the underlying tone of recent comments from Governing Council members suggests that the majority are not overly … [Read more...] about ECB – Still erring on the side of caution