Tensions between the US and North Korea seemed to escalate further after President Trump dismissed any diplomatic negotiations, while North Korea mounted another ballistic missile test causing further tension across the globe. A next step could be an oil embargo imposed by Chinese authorities although this would likely create a humanitarian crisis along their border.
Hurricane Harvey hit Houston and the Texas coast impacting global energy markets, with millions of barrels of fuel rerouted to the US to avert shortages. Almost a quarter of US refineries were shut down and pipelines closed. In contrast to previous hurricanes, the oil price fell as traders focused more on the potential fall in demand from damaged US refineries than the hit to supply from reduced production.
US GDP was revised higher to show a 3 per cent annual growth rate in the second quarter, due partly to robust consumer spending as well as strong business investment. This all points to an economy that continues to grow reasonably strongly and one in which personal consumption is becoming much broad based.
However tepid inflation and wage growth casts doubts on whether the Federal Reserve will increase interest rates at its December policy meeting. Debt levels, ageing demographics and technological disruption remain key disinflationary trends that continue to provide a challenge for policymakers.
Economic confidence in the eurozone rose to its highest level since July 2007, in the latest in a series of stronger than expected indicators of confidence in the region. The positivity was shared by businesses across different sectors, including industrial and service sectors. Moody’s, the rating agency, later upgraded its 2017 forecasts from 1.7 per cent to 2.1 per cent.
On a visit to Japan last week, UK Prime Minister Theresa May confirmed that she would be leading the Conservative Party into the 2022 UK election. While back in Europe, Brexit negotiations were marred by disagreement over the terms of Britain’s divorce bill. In a heated press conference, the EU’s chief negotiator, Michel Barnier stated that Britain wants an impossible deal and that no decisive progress had been made.
India’s economic growth slowed further to 5.7 percent in the quarter from April to June, the weakest performance since early 2014, blamed on the lingering impact of last year’s cash ban, and caution ahead of the adoption of a new value-added tax system. It is the fourth consecutive quarter of decelerating growth, sharply down from the 7.9 percent growth recorded in the same period last year, and raises serious questions about the likelihood of reaching the government’s target of economic growth of over 7 percent in the current financial year
If you would like more information on the above article or advice on your personal financial circumstances, please contact us >>