Sometimes, optimism can be infectious.
The cheery mood in financial markets, where global stock markets have risen about 4 per cent in the first three weeks of the year, spread this week to the rarefied atmosphere of the World Economic Forum in Davos.
The annual gathering of business, economic and political elites in the Swiss Alps divides opinions. But it is an ideal place to take the global temperature on economic sentiment — and the consensus view seemed to be that conditions had bottomed out and were becoming more positive.
Many had expected 2023 would bring a lasting hangover from Russia’s war in Ukraine, continued Chinese economic weakness and the devastating effects of high energy and food prices on living standards across the world.… Seguir leyendo »
The world’s leading central banks talked tough this week, but carried a smaller stick.
After a series of meetings on Wednesday and Thursday, the Federal Reserve, European Central Bank and Bank of England all chose to shift their inflation-fighting strategy from a recent pattern of interest rate rises of 0.75 percentage points down to a half point. Switzerland, Norway, Mexico and the Philippines also slowed the pace of interest rate rises.
They married weaker action, however, with stronger words. The Fed talked of having “more work to do” to defeat high inflation, the ECB spoke of “more ground to cover” while the BoE insisted it needed to be “forceful” in battling price rises.… Seguir leyendo »
With their bills sharpened and talons on display, the world’s central banks fully adopted the posture of the hawk this week. Backed by sharp rises in interest rates and currency intervention, they have used pointed language to advertise their singular aim of defeating the scourge of inflation.
In one of the most sudden shifts in global economic policymaking in decades, central bankers say they have had enough of rapid price rises and insist they are prepared to act to restore price stability, almost at any cost.
But after a week of dramatic announcements from central banks around the world, at least some economists are beginning to ask — are they going too far, too fast?… Seguir leyendo »
As he battled to save his job this month, Boris Johnson warned his MPs not to get into “some hellish, Groundhog Day debate about the merits of belonging to the single market”. Brexit, he warned his mutinous party in a sweaty House of Commons meeting room, was settled.
Later that day, Johnson limped to victory in a confidence vote, but only after 41 per cent of his MPs had voted to oust him from Downing Street. He is safe for now but the defining project of his premiership — Brexit — still hangs like a cloud over Britain’s fragile economy.
Johnson may not want his party “relitigating” Brexit but neither does Sir Keir Starmer, leader of the opposition Labour party, around a third of whose supporters voted Leave in the 2016 referendum.… Seguir leyendo »
Professor Thomas Piketty’s Capital in the 21st Century has data on wealth inequality at its core. His data collection has been universally praised. Prof Piketty says he has collected,
“as complete and consistent a set of historical sources as possible in order to study the dynamics of income and wealth distribution over the long run”
However, when writing an article on the distribution of wealth in the UK, I noticed a serious discrepancy between the contemporary concentration of wealth described in Capital in the 21st Century and that reported in the official UK statistics. Professor Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth.… Seguir leyendo »