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Not a lot has changed

Published Tuesday, April 22nd, 2014

The Easter break will have provided the opportunity for many to have visited the golf course, grab a last few ski runs, sit in front of the TV or even spend some time with the kids. Others will have found themselves drawn to more anal activities. Nothing could be more anal than taking took a look at PVM reports written at the beginning of the year, which is what I found myself doing.

It is striking how common the concerns are 4 months later, how little has been clarified and how much remains to be resolved. The consensus central bank ambition at the beginning of the year was to achieve normalisation, in financial terms defined as reaching in developed countries an unemployment level of 5 to 7%, inflation of 2% and GDP growth of 3%. It was a very modest ambition, but nobody can say with any conviction, a quarter of the way through the year, that the targets are even close to being in the bag.

The Eurozone is still struggling with an unemployment rate of 12%, both the ECB and Federal Reserve are fretting about deflation, not inflation and whilst global GDP growth this year is expected to beat 3% the latest IMF forecast is only 2.2% for developed countries. For all of the hullaballoo about record stock market highs the facts are that year to date the Dow is down 1.01%, the FTSE 100 down 1.83%, the Eurotop only up 0.65%, Shanghai down 0.81% and the Nikkei down 10.9%.

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Posted by David Hufton