Uncertainty about economic policy, globally, has risen in recent weeks. Most readers would probably accept that, without needing statistical confirmation. Nevertheless, it can be informative to quantify uncertainty, both through time and across countries. That is what this week’s chart tries to do, using data from www.policyuncertainty.com made available on Datastream. Its approach is based on a word count of newspaper articles. It shows, perhaps unsurprisingly, that uncertainty about economic policy has risen most dramatically in Canada; a country that exports around 20% of its GDP to the US in the form of goods, and is now facing a 25%

It has been a busy week for economists, especially for those engaged in financial markets. By our reckoning, the cumulative increase in the US effective tariff rate since inauguration day went from around 12 percentage points on Monday morning, to some 30 percentage points as US markets opened on Wednesday. It eased back to 28 percentage points before the end of the day, as blanket tariff increases above 10 percentage points on most countries were suspended, while the increase imposed on China was raised to 125 percentage points. On Thursday, that 125 percentage points turned into 145 percentage points and

The list lengthens as President Trump reiterated his intent for India to join the likes of Canada and Mexico, with plans to raise US tariffs by 2 April. India has traditionally been more of a closed economy and maintained tariff rates above global norms, imposing a mean average 14.36% rate in 2022 — much higher than the average tariff imposed by the US of 2.7%. Mr Trump aims to address this imbalance. Refresh this chart in your browser | Edit the chart in Datastream India is forecast, by the IMF, to become the world’s third largest economy by 2028 (when measured at

More than three years have passed since the outbreak of war between Ukraine and Russia. However, following the inauguration of Donald Trump in January, and subsequent dialogue between the United States and Russia, there has been talk of a potential peace settlement. But the recent meeting between Mr Trump and Ukrainian’s president, Volodymyr Zelensky did not go well, leading to uncertainty regarding the continuation of US military and financial support for Ukraine. Europe has stated its intention to step up its assistance in response, but what that may look like remains unclear. A peace deal still seems to be the

As the sun sets on another year, one key reflection that carries into this current year is whether the remarkable market resilience of 2024 — and the post-COVID era more broadly — can be sustained as we assess key risks and trends for 2025. US exceptionalism was the hallmark of both economic and financial market resilience during 2024. This outperformance can be explored through three key dimensions. First, cyclical economic trends supported robust US growth, with the economy expanding nearly 2% in the first three quarters of 2024. Solid consumption, investment and government spending helped the US significantly outpace other

Falling inflation has lifted consumer confidence in the UK, US and EU, providing a boost to political incumbents ahead of upcoming elections. UK consumer confidence rose across all categories in January, according to GfK, a market research company, a fact which is likely to be welcome news for Rishi Sunak, the prime minister. However, it may take more than improved consumer confidence to turn around the 14 per cent approval rating of the current UK government, which must call an election within a year. In the US sentiment rose sharply in both December and January, reaching its highest level since

The US economy is the largest in the world, when GDP is measured at market prices. It also has among the highest income levels in the world, ranking first among the G7 group of advanced economies for GDP per capita and GDP per employee. It is very difficult to explain the precise reasons for this enduring economic success. However, some of the most common cited factors are: a large and captive domestic audience; entrepreneurial drive; world-leading educational institutions; and deep and liquid financial markets. Fathom research suggests that relatively high levels of R&D play an important role, too. The US

In Fathom’s Global Outlook, Summer 2023, we changed one of our key calls. We removed a global recession this year from our central scenario. At the time the forecast was finalised in early June, real wages in the US had already started to rise on a twelve-month basis. Our judgement was that this pattern would soon be repeated in the euro area and in the UK. Most major economies had got through the worst of the cost-of-living crisis without entering a period of economic contraction. There were one or two exceptions — the euro area had just suffered two consecutive

Interest rate hikes, sharp increases in the cost of living and energy price shocks have dominated economic news headlines this past year, yet the global economy is proving to be surprisingly resilient. Most major economies have avoided a recession, so far, with only a few countries and regions, such as Germany and the euro area, experiencing a technical recession. Economic activity remains fairly strong as household spending continued to grow despite the sharp fall in real wages globally, supported by fiscal transfers, excess savings accumulated during the pandemic and net migration. Refresh this chart in your browser | Edit the chart in

Despite the significant market volatility witnessed around the time of Silicon Valley Bank’s collapse in mid-March, concern about the banking sector has not significantly dented wider asset prices. The year so far has been a positive one for investors, in stark contrast to 2022. Gold, a safe-haven asset, has been among the best performers this year. That has not been indicative of a general ‘risk-off’ mood across the first quarter, though, with positive returns recorded on all major asset classes except commodities — and US banks, of course. The story has been almost exactly the reverse of 2022, when a

In early February, Fathom warned that the receding probability of a recession might be superseded by the risk of higher rates, and that moving to such a scenario would not improve the outlook for markets. The two outcomes were also not mutually exclusive — the chances of suffering both were always a matter of timing. This is almost exactly what has happened over the past month. The chart below shows how investors have backtracked on expectations of rate cuts and priced in further rate hikes over the next twelve months. As in February, inflation expectations remain the key variable determining

The European economy defied expectations in 2022 but a recession is still on the cards this year. Output fell in Germany and some other industry-intensive economies in the final quarter of last year; consumer confidence (while improving) remains weak; but headline inflation surprised to the downside. Understanding the relevant force of these factors in each European economy is crucial to determining where and when recessions are first likely to materialise. The starting point is that most European economies have now recovered their pre-pandemic levels of output. While this took far longer than for China and the US, the other major