{"id":3472,"date":"2021-12-08T10:37:06","date_gmt":"2021-12-08T10:37:06","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/2021\/12\/08\/news-in-review-34\/"},"modified":"2022-07-05T14:10:06","modified_gmt":"2022-07-05T13:10:06","slug":"news-in-review-34","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2021\/12\/08\/news-in-review-34\/","title":{"rendered":"News in Review"},"content":{"rendered":"
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\u2018The global recovery is strong but\nimbalanced\u2019 <\/em><\/strong><\/em><\/strong><\/p>\n<\/div>\n\n

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Last\nweek saw the Organisation for Economic Co-operation and Development (OECD)\npublish its latest appraisal of world economic prospects. In a relatively\nupbeat assessment, the Paris-based soothsayer predicted that global growth will\nhit 5.6% this year before moderating to 4.5% in 2022 and 3.2% in 2023. However,\nthe OECD did warn of potential risks suggesting the global recovery is strong but imbalanced<\/em>.\u2019 <\/strong><\/p>\n<\/div>\n\n

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Perhaps unsurprisingly, a key area of concern relates\nto the Omicron COVID variant which OECD Chief Economist Laurence Boone said\ncould pose \u201ca threat to the recovery, delaying\na return to normality or something even worse<\/em>.\u201d However, while the\nforecasting agency did warn that the new variant threatens to intensify the imbalances\nthat are slowing growth and raising inflationary pressures, it also advised\nmonetary policymakers to be \u2018cautious<\/em>,\u2019\nstating that the most pressing policy requirement was currently to accelerate the\nvaccine roll-out programme globally.<\/p>\n<\/div>\n\n

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UK\ngrowth forecasts<\/strong><\/p>\n<\/div>\n\n

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In terms\nof the UK economy, the OECD increased its 2021 growth forecast to 6.9%, 0.2\npercentage points higher than previously expected. This upgrade propelled the\nUK to the top of this year\u2019s G7 growth rankings, although looking further ahead\nthe OECD did warn that \u2018a prolonged\nperiod of acute supply and labour shortages could slow down the recovery<\/em>.\u2019<\/p>\n<\/div>\n\n

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Similar\nthemes also featured in Monday\u2019s updated forecasts released by the Confederation\nof British Industry (CBI) and accounting firm KPMG. The CBI said it now expects\ngrowth of 6.9% this year and 5.1% in 2022, downgrades from previous predictions\nof 8.2% and 6.1%, which largely reflect weaker-than-anticipated data released\nsince its June forecast. KPMG issued a more pessimistic prediction; its\n\u2018best-case\u2019 scenario forecasts a growth rate of 4.2% next year, with any additional\ndisruption due to the Omicron strain expected to dampen the recovery further.<\/p>\n<\/div>\n\n

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Rate rise in the balance <\/strong><\/p>\n<\/div>\n\n

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The economic impact of the new virus strain is also inevitably featuring\nin Bank of England\n(BoE) policymakers\u2019 deliberations. In a speech on Friday, Michael Saunders, one\nof two Monetary Policy Committee (MPC) members to vote in favour of a rate hike\nlast month, cast doubts on whether he will take a similar stance at next week\u2019s\nmeeting. Mr\nSaunders said, “At present, given\nthe new Omicron COVID variant has only been detected quite recently, there\ncould be particular advantages in waiting to see more evidence on its possible\neffects on public health outcomes and hence on the economy.”<\/em><\/p>\n<\/div>\n\n

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On\nMonday, however, comments made by another MPC member highlighted the dilemma\ncurrently facing the Bank\u2019s policymakers. BoE Deputy Governor Ben Broadbent\nsaid inflation could “comfortably\nexceed<\/em> 5% when the Ofgem cap on retail energy prices is next adjusted in\nApril”<\/em> and\nsuggested the tight labour market risked becoming a more persistent source of\ninflation. Following both sets of comments, analysts suggested a December rate\nrise very much hangs in the balance. <\/p>\n<\/div>\n\n

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No sign of labour squeeze easing <\/strong><\/p>\n<\/div>\n\n

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Data released last Friday\nfound the shortage of workers that is hampering UK businesses shows no signs of abating. According\nto figures from the Recruitment & Employment Confederation (REC), the\nnumber of job adverts continued to grow rapidly last month, with a further\n210,000 new adverts posted during the week of 22-28 November. This took the total number of\nactive job postings to over 3.5 million, a 16% increase since the end of\nOctober. REC Chief Executive Neil Carberry commented, \u201cThe growth in job adverts shows no signs of slowing as we reach the\nChristmas peak.<\/em> Firms need to think about how they will\nattract staff facing greater competition than ever before.\u201d<\/em><\/p>\n<\/div>\n\n

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House prices\ncontinue to rise<\/strong><\/strong><\/p>\n<\/div>\n\n

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Two house price\nindices were released in the last seven days, with both showing a continuation\nof the recent surge in prices. The Halifax index posted a fifth consecutive\nmonthly rise, with prices in November 8.2% above year-earlier levels, which the\nmortgage lender said reflected a shortage of available properties, strong jobs\nmarket and low borrowing costs. Nationwide reported annual house price growth of\n10% in November, although\nthe\nbuilding society described the outlook as \u2018uncertain\u2019,<\/em>\nwith concerns expressed over the impact of the Omicron variant on the wider\neconomy. <\/p>\n<\/div>\n\n

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Here to help<\/strong><\/p>\n<\/div>\n\n

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Financial advice is\nkey, so please do not hesitate to get in contact with any questions or concerns\nyou may have.<\/p>\n<\/div>\n\n

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The value of investments can go down as well\nas up and you may not get back the full amount you invested. The past is not a\nguide to future performance and past performance may not necessarily be\nrepeated.<\/strong><\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

\u2018The global recovery is strong but imbalanced\u2019 Last week saw the Organisation for Economic Co-operation and Development (OECD) publish its latest appraisal of world economic prospects. In a relatively upbeat assessment, the Paris-based soothsayer predicted that global growth will hit 5.6% this year before moderating to 4.5% in 2022 and 3.2% in 2023. However, the […]<\/p>\n","protected":false},"author":12,"featured_media":123461,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,112],"tags":[],"hd_content_source":[116],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/3472"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=3472"}],"version-history":[{"count":1,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/3472\/revisions"}],"predecessor-version":[{"id":3474,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/3472\/revisions\/3474"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=3472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=3472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=3472"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=3472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}