You cannot force us to forecast Brexit

Posted by: Paul Donovan

17 Oct 2019
  • We are close to the last minute in EU-UK negotiations. This is good because EU deals are nearly always done at the last minute. However, the chance of an end to the interminably tedious divorce process lies in the hands of a small number of UK members of Parliament representing parts of Northern Ireland.
  • It cannot be reasonable to ask an economist to predict the actions of ten people. Economists live in a world of rational decision-making. This is not that world. Sterling keeps moving about. This is because foreign exchange dealers apparently believe they can predict the actions of ten people.
  • The US Federal Reserve's Beige Book signalled slower economic activity, but a still strong labor market with wage growth. Trade taxes are having an impact, but for the most part are reported to be affecting corporate profit margins rather than consumer prices. This is a report which gives reasons to worry about the US outlook, but does not give a reason to panic.
  • US industrial and manufacturing production data is due. The initial jobless claims data will also be watched – the strength of the labor market supports the US consumer, which prevents the downturn turning into something worse.