The weaker global backdrop is weighing on exports. Brexit uncertainties have continued to weigh on business investment, although consumption growth has remained resilient, supported by continued growth in real household income. The Committee judges that underlying growth has slowed, but remains slightly positive, and that a degree of excess supply appears to have opened up within companies. The Bank of England released its latest Meeting Minutes, which contained the following general assessment of the UK economy (emphasis added):īrexit-related developments are making UK economic data more volatile, with GDP falling by 0.2% in 2019 Q2 and now expected to rise by 0.2% in Q3. This is supporting household spending, which has increased in 10 of the last 12 months (Y/Y). But, like other countries, unemployment is low: it's currently 3.4%. The manufacturing PMI has shown a contraction in 10 of the last 12 quarters, causing industrial production to contract in 6 of the last 12 months (Y/Y).
Between 3Q16 and 2Q18, it averaged 3% over the last four quarters, it has dropped to 2.2%. South Korean annual GDP growth has slowed over the last four quarters. South Korea is the 4th largest economy in Asia, behind China, Japan, and India. Going forward the Board expects domestic economic growth to fall below the July projection, owing chiefly to the continued US-China trade dispute and the heightened geopolitical risks. Employment conditions have partially improved, with the increase in the number of persons employed having risen. The Board judges that the pace of domestic economic growth has remained slow, as consumption growth has weakened, while the adjustment in construction investment and the sluggishness in exports and facilities investment have continued. Here is how the bank described the domestic economy (emphasis added): Like other central banks, they are concerned about the negative growth resulting from the US-China trade dispute. South Korea lowered rates 25 basis points to 1.25%. But the global growth slowdown has clearly hurt the EU, where industrial production has trended modestly lower over the 18 months. Hopefully, Johnson will be able to get Brexit done, which will remove one uncertain event from the ledger. UK/EU conclusion: The continent is still having serious economic problems. Industrial production increases 0.4% M/M/-2.8% Y/Y.Retail sales: +0.6% rolling 3-month basis +3.1% Y/Y.The trade war is also hurting Japan as witnessed by its negative Y/Y industrial production number and, as reported below, South Korea cutting rates out of concern for its growth. China's GDP growth was the " worst in three decades" and continues to point to an economy that is slowing or making the transition to developed status, meaning it will no longer be the global growth juggernaut. Industrial production +8.2% in the first three quartersĪsia conclusion: Asian data continues to be weak.Retail sales + 8.2% in the first three quarters.
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