Saturday, June 10, 2017

Global growth headed for six-year high; UK poll unnerves investors; Trump points finger at Qatar

1 Global growth headed for six-year high (Khaleej Times) The global economy is on course this year for its fastest growth in six years as a rebound in trade helps offset a weaker outlook in the US, the OECD has forecast.

The global economy is set to grow 3.5 per cent this year before nudging up to 3.6 per cent in 2018, the Paris-based Organisation for Economic Cooperation and Development said, updating its forecasts in its latest Economic Outlook.

That estimate for 2017 was not only a slight improvement from its last estimate in March for 3.3 per cent growth, but it would also be the best performance since 2011. Yet despite this brighter outlook, growth would nonetheless fall disappointingly short of rates seen before the 2008-2009 financial crisis, OECD Secretary General Angel Gurria said.

The improvement would also not be enough to satisfy people's expectations for better standards of living and reduce growing income inequality, he said. Among the risks to the OECD's outlook, it warned that the growing divergence between monetary policy rates among the major central banks raised the chances for financial market volatility.


2 UK poll unnerves investors (BBC) Fears that political uncertainty will hurt consumer spending have hit shares in UK retailers and housebuilders. The prospect of a hung parliament and speculation about the election result's impact on Brexit saw the value of sterling slide against the dollar.

"Disposable incomes will be stretched," said analyst Nicholas Hyett The weakening pound makes imported goods' prices higher and squeezes consumers' ability to spend.

Mr Hyett, from Hargreaves Lansdown, ran through the affected sectors: "Housebuilders are down across the board, but they're joined by restaurants, high street banks, fashion retailers and media outlets. Investor sentiment was not helped by the latest UK industrial production figures, which showed output rose by less than had been expected.


3 Trump points finger at Qatar (David Smith, Sabrina Siddiqui & Peter Beaumont in The Guardian) Donald Trump has accused Qatar of sponsoring terrorism at the highest levels, in an extraordinary escalation of the diplomatic row with one America’s most important military partners in the Middle East.

Trump said he had decided “the time had come to call on Qatar to end its funding … and its extremist ideology.” His comments marked his most forthright intervention in a crisis triggered on Monday when Saudi Arabia and its Gulf allies launched a co-ordinated diplomatic and economic campaign to isolate Qatar.

Trump’s intervention came after Saudi Arabia and its allies on Friday sanctioned a dozen organisations and 59 people it accused of links to Islamist militancy – a number of them Qataris or with links to Qatar. The Qatari government said in a statement: “We do not, have not and will not support terrorist groups.”

US relations with Qatar have long been complicated by Doha’s promotion of a conservative form of Sunni Islam, but the tiny Gulf state is also a close military partner. More than 11,000 US and coalition forces are at al-Udeid air base outside Doha, which is the centre for US air operations over Syria, Iraq, Yemen and Afghanistan.


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