The OECD has issued a report indicating that it believes that the world economy will continue to grow and that this is opening the door to future rate hikes by central banks around the world. Despite this pronouncement,a variety of global political risks and economic problems can limit or reverse this growth and lead to s significant market downturn.
The article indicated the risk that the economy has of overheating and creating new bubbles in property prices they could cause long-term damage to the economy. Economic bubbles, When they inevitably burst, can reduce investor confidence and lead to long-term recessions and depressions in the market.
The OECD Issued a similar warning in Ireland back in 2006 before the recession hit. While the warning issued by the OECD is not as dire or significant, and fewer of the believe that the downtrodden to be a significant as the recession of 2007, and you’re taking this warning seriously. Back in 2006 the morning was not taken seriously.
Another risk for the market is the high level of private debt held by individuals across the world. People tend to spend more when they are confident of the economy and save money during down times. This leads to more significant down and upturns in the economic markets, which is Illustrated by the all time market highs.
There are also risks surrounding a lack of unemployment which can lead to inflation through increased wages. There are clearly a lot of risks that the market is facing globally.
British Prime Minister Theresa May has recently spent some time meeting with members of the powerful European Roundtable of Industrialists, at which the politician was warned of coming problems associated with “Brexit”. The U.K. voted in a referendum to leave the European Union and the free trade zone which has raised concerns among top executives over taxation and fees, according to the BBC.
Although Mrs. May tried to put a positive spin on the meeting stating it had been productive others in attendance revealed the industrial executives warned of a grim future for the U.K. Executives attending the meeting came from some of the top 50 companies in the EU including BMW, Nestle, and E.On Among the issues raised over the course of the meeting was a concern that a lack of security concerning the deal the U.K. hopes to achieve with Europe to secure its trade deals following its departure from Europe would lead to a lack of future investment.
There is a hope among top executives that a deal will be reached at some point before “Brexit” goes into effect which will allow the uninterrupted flow of goods in and out of Europe from the U.K. to continue. British-based companies are trying to push for a so-called “soft” border between Northern Ireland and the Irish Republic to allow the movement of goods and people to be simple and efficient following the political disentanglement.
The deadline for the relief initiative on the tariffs on foreign steel and aluminum is Friday and United States President Donald Trump announced that he would not be extending the waiver on these tariffs.
At midnight Thursdays, the exemption will expire and Mexico, Canada, and the European Union (EU) will all be hit with stiff trade penalties. According to a statement by Commerce Secretary Wilbur Ross, the US will begin assessing tariffs of 25 percent on imported steel and 10 percent on imported aluminum.
Both Mexico and the EU wasted no time in saying that they would respond with penalties of their own against the US. Mexico said they would retaliate with tariffs against American pork, cheese, fruit, lamps, and flat steel. The EU did not announce specific products yet but did say that they explore the issue. Canada has not announced retaliatory efforts, however, Prime Minister Justin Trudeau has scheduled a press conference later on Thursday to discuss the plan.
By imposing tariffs on Canada and Mexico, two of the biggest trade partners of the US, negotiations regarding NAFTA could be negatively impacted.
Financial experts worry that the decision to impose these tariffs will raise everyday prices on a variety of products for American consumers. The decision also comes at an inopportune time, as the US is already engaging in an escalating trade dispute with China. On Tuesday, the White House announced that it was continuing its plan to impose tariffs totaling more than $50 billion on Chinese imports.