Articles - Schroders Viewpoint: Economic and Strategy Viewpoint

 Schroders' Chief Economist and Strategist, Keith Wade, and European Economist, Azad Zangana comment on the outlook for Global and UK economies.Global: debt woes bring political risk to the fore

 
•   Markets focussed on debt problems in US and Europe, causing the progress of recovery to take a backseat.
 
•   It is widely expected that a last minute deal will be agreed by the Republicans and Democrats, or that the US Treasury will find a way to meet coupon payments.
 
•   It can be said with some certainty that an agreement to lift the debt ceiling will not be the end of the story - the US could still be downgraded unless a long-term solution is found.

 UK: Bad luck or a more serious problem?

 
•   UK economy slowed to almost stand still in second quarter - is this the start of a downward spiral or is there good reason behind the disappointing growth?
 
•   Temporary factors have had a major impact on the latest set of data - excluding these special factors, growth would have accelerated rather than slowed.
 
•   Underlying growth is believed to remain robust and is expected to pick up in the second half of the year. Government is not expected to deviate from current strategy and Bank of England should resist temptation to restart quantitative easing.

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