GDP

UK: OECD predicts weak economy due to Brexit

The Organisation for Economic Cooperation and Development on Tuesday issued a forecast for weak economic growth in the UK over the next two years that is worse than a much reduced estimate published last week by Britain’s fiscal watchdog.

The club of rich nations expects Britain’s economic growth to drop sharply from a rate of 1.5 per cent in 2017 – placing the UK at the bottom of the G7 group of countries – to 1.2 per cent in 2018 and 1.1 per cent in 2019.

“The growth slowdown is expected to continue through 2018, due to continuing uncertainty over the outcome of negotiations around the decision to leave the European Union and the impact of higher inflation on household purchasing power,” said the OECD, adding that there would be a “moderate” rise in the UK’s current 4.3 per cent unemployment rate.

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Swiss economy accelerates in Q3 for manufacturing

Switzerland’s economy grew 1.2 percent year-on-year in the third quarter, accelerating sharply from the weak second quarter as manufacturing and exports picked up.

Switzerland’s gross domestic product rose 0.6 per cent quarter on quarter in the three months to the end of September, according to the State Secretariat for Economic Affairs. That was in line with a median estimate compiled by Reuters of 0.6 per cent. GDP growth for the second quarter was also revised up to 0.4 per cent from 0.3 per cent.

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Should I stay or should I go?

Global equities have powered ahead in recent weeks, in line with our pro-growth investment stance. Our view remains that the global macro backdrop should continue to support investor economic confidence and drive the valuations higher over the next year.

Still, there is a risk for some near-term disappointments, given that the Chinese housing market and industrial economy are maybe downshifting more than investors acknowledge. Also, the US ISM manufacturing index has been boosted by US dollar weakness and is likely to pull back somewhat.

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Tense times ahead for Mexico

The Mexican economy has essentially been a two-part tale lately: oil and services. The oil sector has been reformed for the better during President Pena Nieto’s term. But the reforms have nevertheless been overwhelmed by the sheer extent of the oil price drop. It is weakening exports, reducing tax revenues and hurting growth to the extent that the sector now accounts for around 4% of GDP, much less than in the past.

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Swiss GDP stopped running in last three month

Switzerland’s economy grew at a slower pace than expected in the three months to June as growth provided by the financial sector and hotels was offset by “sluggish” growth for trade and public administration.

Gross domestic product grew 0.3 per cent quarter on quarter in the three months to June, according to the State Secretariat for Economic Affairs, coming in below economists’ estimates compiled by Reuters of 0.5 per cent growth.

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