Catalonia experienced a contentious referendum to declare independence from Spain amid violent clashes as the constitutional court banned the vote and sent Catalan’s autonomy into question. To date, a declaration of independence would have no legal force, and unlikely to have backing from the international community. Nevertheless, it remains a challenge of authority and revives the populist vote.
Donald Trump unveiled some details of his proposed tax reforms last week. Mid-term elections are due next November and the pressure to implement a strategic tax reform package has increased, even though US GDP growth was revised upwards to 3.1 per cent. The individual tax rates were highlighted including a recommendation for a surcharge for the very wealthy. But President Trump did not set out the income levels at which the rates would apply, so it is unclear just how much of a tax cut would go to a typical family. The reforms have come under fire for favouring only businesses and the rich.
UK GDP rose by just 1.5 per cent annually in the second quarter of 2017. That is the slowest annual growth since 2013. However, there was positive news in the composition of growth in the second quarter, which showed bigger contributions from business investment and exports. With inflation above the Bank of England’s target Mark Carney has hinted that interest rates are likely to rise in November. Given that growth is falling, inflation potentially peaked combined with a high indebted consumer, any monetary tightening will be difficult to justify.
Eurozone manufacturing firms reported their strongest month of job creation on record in September. The manufacturing purchasing managers’ index for the currency area came in at 58.1, representing a six and a half-year high. Germany’s figures were particularly strong with manufacturing growth expanding at a rapid pace.
Oil prices rose following forecasts for rising demand and as Turkey threatened to halt Kurdish exports through its territory after the region voted for independence from Iraq.
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