The latest predictions suggest that the British economy will grow next year. However, it is now believed that the growth will be only 1% which is lower than had previously been predicted.
The updated prediction comes from the EY ITEM Club. This is an economic forecasting group that looks at official Government data to spot trends.
The Fully Story
The British economy suffered another drop in the key services sector in October. The latest figures to be released showed that this was the seventh month of 2019 with declining new orders.
Particularly noteworthy was the ongoing struggle of the UK’s car industry, which now shows an annual drop of 6.7%.
The Overall Figures
The latest numbers to be released by the Office for National Statistics (ONS) show that employment has dropped at a faster pace than at any time in the last four years. Pay growth has also fallen in the last quarter.
The Full Figures
Amid a slowing global economy, Japan is the latest country to produce disappointing GDP figures. The third-biggest economy on the planet failed to grow significantly in the third quarter of 2019, with more bad news expected in the final quarter of the year.
What Do the Results Show?
The arrival of negative interest rates has led to changes in how banks deal with their clients’ accounts. An example comes from Germany, where it has been revealed that more than half of the banks charge negative interest rates on corporate deposits. Meanwhile, banks there are dealing with falling profit levels.
Details of the German Survey
The People's Bank of China have announced a small cut to interest rates. This move is seen by economists as a sign the authorities are still working hard to pull the economy out of a slump.
What Cuts Have Been Made?
The new lending rates in China saw a five basis point drop on the one-year loan prime rate (LPR), from the previous figure of 4.20% to 4.15%. The five-year LPR rate was reduced from 4.85% to 4.8%. The LRP was only introduced in August of this year as a new benchmark that may eventually replace the fixed lending rate that is currently used.
Fed is “strongly committed” to sticking to their target of a 2% inflation rate.
This has been taken as a sign that the central bank isn’t planning to cut or raise interest rates in the near future. They believe that an inflation rate of 2% is the right level for allowing sustainable growth. It also gives them a degree of flexibility in terms of being able to change the interest rate if the economy goes downhill.
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