60 seconds with Keith Wade on cutting his global growth forecast

Keith Wade explains why the economics team has trimmed its forecast for global growth this year.


Keith Wade

Keith Wade

Chief Economist & Strategist

This month we’ve updated our forecast for the world economy and we’re reducing our forecast for global growth, albeit only very slightly. This is largely to reflect the weakness of activity that we’ve seen so far in 2016 in the developed market economies, particularly the US and to some extent Europe.

Emerging markets

The emerging market forecast actually hasn’t changed and in fact, we’ve seen some good signs of revival beginning to come through in some of the near term indicators. So the forecast for emerging markets doesn’t change but overall, global growth is reduced.


We still expect the Federal Reserve (Fed) to raise rates at the end of this year and that’s really reflecting the profile of activity that we see in the US. So, having been quite weak so far this year, we think that growth will actually pick up somewhat in the third quarter, and as we move towards the end of this year.

Inflation is also likely to pick up a little as well and we think that’ll be sufficient for the Fed to raise rates by 25 basis points at the end of 2016.

Europe and Japan

Elsewhere though, we think interest rates are likely to come down. That means that the Bank of Japan and the European Central Bank are going to cut interest rates further into negative territory. We also think the Bank of England will cut rates again, down to just 0.1% in November.

Important information

This communication is marketing material. The views and opinions contained herein are those of the named author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds.

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 Schroder Investment Management Ltd (Schroders) does not warrant its completeness or accuracy.

The data has been sourced by Schroders and should be independently verified before further publication or use. No responsibility can be accepted for error of fact or opinion. This does not exclude or restrict any duty or liability that Schroders has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. 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 guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.  Exchange rate changes may cause the value of any overseas investments to rise or fall.

Any sectors, securities, regions or countries shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. Forecasts and assumptions may be affected by external economic or other factors.

Issued by Schroder Unit Trusts Limited, 31 Gresham Street, London, EC2V 7QA. Registered Number 4191730 England. Authorised and regulated by the Financial Conduct Authority.