Hot in the City
Reflecting the uncertainty in the global economy and markets, the UK’s weather provided great volatility this month, with Cambridge recording the highest ever temperature in the UK at 38.7C and Cheshire receiving more than twice the average rainfall during the month.
The conclusion from the recent G20 meeting and from central banker’s analysis more recently is that risks in the global economy are increasing from protectionist policies. Global growth has slowed with manufacturing and export data falling. The manufacturing slowdown is broader and deteriorating further than the contraction in 2015/16. Global trade remains weak, with inflation and business confidence subdued as uncertainty pervades markets. Equity markets have shown resilience in the wake of macro headwinds with the help of loosening and accommodative monetary policies.
In its latest World Economic Outlook the International Monetary Fund noted that global growth is “sluggish”. Emphasising subdued momentum caused by weak demand, soft global trade, muted inflation and mixed policy cues.