Highlights of the week
Economist insights: Mixed data in the US, slowdown in Chinese GDP growth and continuing uncertainty about Brexit
- Latest economic data for the labour market and for consumption was positive...
- ... but more disappointing for the industry at the start of 2019...
- ... in line with our scenario of a slight moderation in US GDP growth to 2.7% in 2019
- GDP growth slowed from 6.5% to 6.4% year-on-year in the fourth quarter
- However, the acceleration in investment in infrastructure and bank credit shows that the stimulus plan is starting to produce effects
- The government announced new tax cuts, thus confirming its intention to support the country’s economy
- The House of Commons rejected the deal proposed by Theresa May, meaning the conditions of the UK’s exit from the European Union remain uncertain
- We maintain our scenario according to which a no-deal Brexit would send the UK into recession
Focus eurozone: What are the factors that determine wage growth?
- Our analysis shows that wage growth is dependent not only on the labour market, but also on actual inflation in Germany...
- ... while inflation expectations are a determining factor of wage growth in the eurozone
- According to our analysis, the weak inflation expectations would lead to a slowdown in nominal wage growth in the eurozone from 2.5% in Q3 2018 to 2.0% on average in 2019
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