The `square root` recovery Looking for a global locomotive A pay

advertisement
√
Schroders Economic Infographic July 2015
The ‘square root’ recovery
4.6%
The recovery in growth
after the global financial
crisis resembles
the square root sign
Following the initial
collapse & rebound,
global growth has
flattened at a steady,
albeit sub-par rate,
of 2.5%
UK labour
shortages
3.3%
2.5%
2.2%
08
2.6% 2.6%
UK is running out
of spare capacity
2.9%
Indicators point to a
shortage of labour
+ early signs of
wage inflation
-1.3%
09 10 11
2012 - 2015
12
Year
13
14 15
Firms may have to
compete to recruit
+ retain staff
1
16
2
3
2016
This should result
in accelerated
wage growth
However, we expect a continued
recovery in Europe + Japan,
as well as steady growth in the US.
Global slowdown is largely
accounted for by weaker
demand in the West for
emerging market exports
%
2.9% global
growth in 2016
2016 = EM
exports
BoE relaxed:
expected
productivity
recovery
= no need to
hike interest rates
We believe the
first interest rates
hikes will appear
in February 2016
Looking for a global locomotive
US no longer the global
locomotive it once was:
The economy is not in a
position to continue as a
driver of global growth
Just
escaping
deflation
Relying on
currency
devaluation
to reflate
activity
Too small,
represent
10 % of
global
activity
India as
global driver
is slightly
optimistic
It is difficult to
see who may take
responsibility
The absence of a
global locomotive
means that we are
unlikely to break
with the square
root recovery
• Subdued growth
• Ageing workforce
•
Inflationary pressure
•
Interest rates rise
A pay-as-you-go bailout
Eurozone leaders have reached an agreement
over a third Greek bailout
September
GREXIT
Going forward,
there will be a
series of reforms
to avoid a grexit
2015
An agreement will
hopefully be reached
by September 2015
Source: Schroders as at July 2015.
Important Information: Schroders has expressed its own views in this document and these may change. This document is intended to be for information purposes only
and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The
material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be
reliable but Schroders does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the
views and information in the document when taking individual investment and/or strategic decisions. Past performance is not a reliable indicator of future results, prices of
shares and the income from them may fall as well as rise and investors may not get back the amount originally invested. Issued by Schroder Investment Management
Limited, 31 Gresham Street, London EC2V 7QA, which is authorised and regulated by the Financial Conduct Authority. For your security, communications may be taped
or monitored. Visit Schroders Talking Point for market news and expert views http://www.schroders.com/talkingpoint
Download
Related flashcards
Investment

31 Cards

Create flashcards