Economic & Strategy Viewpoint
Janet Mui: weekly economic update 11 July
Powell focused on risks to US economy
The chairman of the Federal Reserve chose to emphasize the risks of slowing global growth in his semi-annual report to the US Congress. This was seen as a clear signal that the Fed will cut interest rates when it meets at the end of July.
UK economic activity remains sluggish
UK output increased very slightly in May, following a weak April. However, businesses and consumers remain cautious and the Bank of England is likely to adopt a more dovish stance.
Latest data suggests Chinese inflation remains contained
There is little sign of underlying inflationary pressure in the Chinese economy, despite a sharp rise in the price of pork. This gives Beijing more scope to implement accommodative monetary policy if needed.