One thing is certain about the 2017 – 2019 Budget period. “Business as usual” is the least likely Scenario to occur. The IMF chart above highlights the key issue: for the past 5 years, all its forecasts of a return to “normal” levels of growth have proved over-optimistic: Back in 2011, the IMF was […]
Chemicals and the Economy
Fed’s economic models applied to a past era
The Financial Times has kindly printed my letter below, welcoming the Fed’s decision to address the impact of demographics, but arguing that it needs to focus on demand issues, given the impact of today’s ageing populations. Sir, It is good to see the US Federal Reserve is finally beginning to address the impact of demographics […]
President Xi takes “core” leader role as China heads for political turbulence
Outside observers often imagine that China’s political structure is uniquely disciplined – unlike, say the US Republican Party, or the UK Labour Party, or indeed, political parties anywhere. But the fact that most arguments take place behind closed doors, and aren’t reported in the state-controlled media, doesn’t mean that the arguments don’t happen. Yesterday’s announcement […]
ExxonMobil, Saudi Arabia, differ on oil outlook – or do they?
If asked about the outlook for prices, oil company CEOs normally duck the question. And they certainly never disagree in public with Saudi Arabia, the world’s leading oil producer. This is what makes the recent speech by ExxonMobil CEO, Rex Tillerson, so interesting: “I don’t quite share the same view that others have that we are somehow […]
Fault-lines open connecting the debt-fuelled ‘Ring of Fire’
Next week, I will publish my annual Budget Outlook, covering the 2017-2019 period. The aim, as always, is to challenge conventional wisdom when this seems to be heading in the wrong direction: The 2007 Outlook ‘Budgeting for a Downturn‘, and 2008′s ‘Budgeting for Survival’ meant I was one of the few to forecast the 2008 […]
Sustainability replaces globalisation as key driver for economy
2 weeks ago, India ratified the COP 21 Agreement. This means the Agreement enters into force on 4 November. 81 countries, responsible for more than 55% of greenhouse gas emissions, have now agreed to reduce emissions in line with the decisions made in Paris last December. And last week saw another landmark Agreement, with 150 countries agreeing to […]
Markets question central bank power as Great Reckoning nears
TIME magazine covers often capture the mood of a moment. And that was certainly true in February 1999, with their now famous cover picturing then US Federal Reserve Chairman, Alan Greenspan, under the heading “The Committee to SAVE the World“. In a further sign of the times, Greenspan was flanked by the US Treasury Secretary […]
Markets doubt Carney’s claim to have saved 500k UK jobs
Last week as the BBC reported, Bank of England Governor, Mark Carney, explained to an audience in Birmingham that the Bank had saved the UK economy after the Brexit vote in June: “Between 400,000 and 500,000 jobs could have been at risk if the Bank had not taken action after the referendum, he said. “We are willing […]
San Francisco Fed agrees ageing Boomers impact economy
Finally, one of the major Western central banks has agreed that the ageing of the BabyBoomers does indeed have an impact on the economy. John Fernald of the San Francisco Federal Reserve Bank, wrote in a new paper this week: “Estimates suggest the new normal for U.S. GDP growth has dropped to between 1½ and […]
Oil markets enter the “post-fact economy”, where details of supply/demand no longer seem to matter
Once upon a time, oil markets were based on facts. Producers and consumers focused on trying to understand what “would” happen”, whilst the speculators placed their bets on what “could” happen. In those days – even 20 years ago, as the chart shows – the role of the speculators on the futures markets was very […]
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