Macroeconomics

Philip Hammond faces another £20bn hole in his deficit reduction plans, as the chancellor comes under political pressure to increase spending in the forthcoming Budget.

Analysis by the influential Institute for Fiscal Studies (IFS), published today, shows that a productivity forecast downgrade from the government’s Budget watchdog may leave the total deficit as high as £36bn by 2021-22, before any extra spending commitments. The major report from the UK’s leading economic think tank shows that deep cuts have left the NHS, schools and prisons in a “fragile state”, and have merely returned public spending to pre-financial crisis levels.

Switzerland’s KOF leading economic barometer rose to 109.1 points in October from a revised 106.1 points in September, the KOF Swiss Economic Institute said on Monday.

A measure signaling future turning points in the Swiss economy improved for the second straight month in October to the strongest level in just over seven years. Economists had expected the index to rise to 106.5.

The European Central Bank on Thursday left interest rates unchanged at historic lows and said its bond-buying programme (quantitative easing, QE) would fall from the present rate of 60 billion euros a month to 30 billion from January to September.
It will continue at 60 billion a month until December. The purchases would continue at least until September 2018.

Swiss watch exports to Singapore surged 90 per cent in September from a year ago, making the island Republic the biggest importer of luxury timepieces that month – after Hong Kong and the United States.

Shipments to Singapore jumped from 94.5 million Swiss francs (S$130.41 million) in September 2016 to CHF 179.2 million last month, figures released by the Federation of the Swiss Watch Industry show.

China will issue 2 billion U.S. dollars worth of dollar-denominated sovereign bonds on Thursday, China’s Ministry of Finance (MOF) said here on Wednesday.
China will issue the sovereign bonds in the Hong Kong Special Administrative Region (HKSAR), including 1 billion U.S. dollars of five-year bonds and 1 billion U.S. dollars of 10-year bonds.

If global stock markets crash, does recession inevitably follow? No, is the short answer…

The Swiss consumption indicator remained slightly above the long-term average in September, data from the UBS investment bank showed Wednesday. The UBS consumption indicator rose to 1.56 points in September, signalling consumption growth slightly above the long-term average. The indicator was supported by significantly higher expectations in the retail industry, but UBS still projects consumer spending to grow 1.3 percent for the year overall.

The world’s 1,000 most innovative companies increased their R&D spending by 3.2 percent in 2017, pushing it to an all-time high of $702 billion (€597 billion), according to the Global Innovation 1000 survey published by consultancy PwC on Tuesday.
The figure marked a resumption of meaningful growth in innovation spending following flat results in 2016, and means the global private-sector spending is now 2.7 times as high as it was in 1999 – the first year for which PwC assembled data.
The rise in R&D spending came despite a 2.5 percent decline in revenue for those 1,000 companies surveyed by PwC. As a result, the combination of overall spending growth and lower revenues led to a record-high R&D intensity rate of 4.5 percent.