In the News

IMF meetings expose the fragility of the world economy

Graham Watson

15th October 2022

Larry Elliott's piece for the Observer is, I think, astute about the implications of last week's IMF meetings. It seems that the 2008 global financial crisis spelt out the dangers of hyperglobalization and that since then there's been a drift away from a multilateral approach to economic policymaking, as Brexit and Trumpian trade wars imply.

Some believe that one of the overlooked factors that has contributed to the moribund state of the global economy since 2008 has been a lack of investment, and that's unlikely to pick up anytime soon.

It seems that the Governor of the Bank of England and the new Chancellor have seen eye to eye over the future direction of economic policy. As a result, whereas analysts previously believed that November's MPC meeting might see a 0.75% to 1.5% rise in interest rates, I wouldn't be surprised to see a larger rise, perhaps as much as 1.5%.

Either way, there seems to be an acceptance of the need to recalibrate and re-assure markets that future policy is more realistic. Read this piece from BBC news.

Is the UK financial crisis going to trigger a wider global financial crisis? This BBC article suggests that any fallout is likely to be limited, although there has been a rise in the cost of government borrowing in the EU and the US too

Read: Will the UK financial chaos spark a wider meltdown?

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.

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