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In September, the Organisation for Economic Co-operation and Development (OECD) released its latest Outlook, entitled ‘Confronting Inflation and Low Growth,’ in which new forecasts reiterating the expectation of a slowdown in the world economy were outlined.

The OECD anticipates global GDP growth to be 3.0% this year, before tempering to 2.7% in 2024. In H1 2023, the report highlights that although the ‘global economy proved more resilient than expected’, looking ahead the growth outlook remains weak, hindered by persistent core inflation and a weaker-than-expected recovery in China, both of which remain downside risks going into 2024.

As usual, wide geographic variations are evident with growth ‘comparatively robust’ in Japan and the US for example, but weak in most of Europe.


The OECD projects GDP growth in the Euro Area to slow to 0.6% this year and to strengthen to 1.1% next year. The report highlights mixed country performances across the region, with Germany expected to experience the heaviest knock from the global economic slowdown, driven by higher interest rates and weaker global trade. The OECD projects GDP growth for Germany to be -0.2% this year and 0.9% in 2024.

OECD Chief Economist Clare Lombardelli commented, “You’re seeing weaker growth across all of Europe, but Germany is probably the largest example. You’re seeing the impact of inflation on real incomes, that’s been suppressing consumer demand. And you’re seeing the impact of monetary policy tightening. Germany, perhaps more than other EU economies, is affected by the slowdown in China. It exports a lot to China, as well as imports, so it’s a combination of factors.”

By way of comparison, GDP growth in Spain this year is predicted to be 2.3%, reducing to 1.9% in 2024, with France 1% and 1.2% respectively.

On the continent in mid-September, the macro focus rested on the European Central Bank (ECB) meeting, during which a decision was made to increase the Bank’s deposit rate by 0.25 percentage points to 4%, as the struggle to control inflation continues. The tenth consecutive increase in 14 months, rates have now reached their highest level in 24 years since the single currency was launched in 1999. The ECB did signal that this could be the last hike for a while, citing in a press release last Thursday that, ‘The Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target. The Governing Council’s future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary.’

Following its latest meeting the ECB commented, ‘The short-term outlook for growth in the euro area has deteriorated, while over the medium term the economy should gradually return to moderate growth as both domestic and foreign demand recover.’

Average inflation in the 20-nation bloc is projected to be 5.6% this year, before falling to 3.2% in 2024 and 2.1% in 2025. The ECB’s medium-term target is 2%.

European markets have been impacted by more persistent inflation than expected and falling consumer confidence.


According to FocusEconomics, following 0.3% GDP growth in Q1, the Swiss economy slowed in Q2 due to rising domestic interest rates. On an annual basis, economic growth lost steam, cooling to 0.6% in Q2. PMI data for Q2 indicated weakened momentum in manufacturing and services, as external demand softened. Low unemployment in the region and more mild inflationary pressures compared with its European counterparts should temper the slowdown. Looking forward, with business conditions for services and manufacturing recording poor summer readings, Q3 should be interesting, with the healthy labour market and receding inflationary pressures providing potential economic lifelines.


The OECD are predicting UK GDP growth of 0.3% this year, improving to 0.8% in 2024. The growth estimate for 2024 was cut from 1% to 0.8%, with only Argentina weaker in the G20.

At its September meeting the Bank of England (BoE)’s Monetary Policy Committee (MPC) narrowly voted to maintain Bank Rate at 5.25%, ending a run of 14 consecutive increases. Five members voted to keep the rate at 5.25%, while the four dissenting voices all favoured another 0.25% increase to 5.5%. The tight decision mirrored the views of forecasters, who had themselves been divided over whether Bank Rate would increase again. With the MPC’s decision, the rate remained unchanged for the first time since December 2021. Although Bank Rate remains at its highest level for 15 years, the change of tactic will likely bring some relief to homeowners, especially those on tracker or variable mortgages.

In September, official figures from the Office for National Statistics (ONS) revealed that inflation dropped to 6.7% in the year to August, down from 6.8% a month earlier. This was the third successive month in which inflation had fallen, with a slowdown in rising food prices, as well as a drop in air fares and accommodation costs all contributing to the lower rate. Despite this, UK inflation remains higher than in most other developed countries. Recent data in Germany (6.4%), France (5.7%), Italy (5.5%) and the US (2.5%) have all come in lower. In response to the UK’s September data, Andrew Bailey, Governor of the Bank of England, struck a cautious tone, “I can tell you that we have not had any discussion… about reducing rates, because that would be very, very premature. Our job is to get inflation down.”

Consumer confidence increased in the UK in September, according to the latest iteration of GfK’s Consumer Confidence Index. With a rise of four points, overall confidence reached -21 in September, the highest it has been since January 2022. Additionally, all five measures – Personal Financial Situation (past and future), General Economic Situation (past and future) and Major Purchase Index – had risen compared to the previous month.

Mixed economic data, and the BoE’s continued hardline stance on interest rate rises continue to weigh on UK markets.


Annual GDP growth in the United States is expected to slow from 2.2% this year to 1.3% in 2024. The US economy has displayed some resilience to the rises in policy interest rates, with household spending supported as people run-down excess savings accumulated during the pandemic. As this fades, the effects of tighter financial conditions are expected to become more prominent.

The US Federal Reserve met in September to discuss monetary policy, where they chose to hold the Federal Funds Target Rate range at 5.25-5.50%, taking a break from their rate-hiking campaign that kicked off last March. The Fed has indicated it may continue to raise rates one more time this year, possibly at the November meeting, data dependent.

The prospect of higher-for-longer interest rates has pressured markets, with recession worries still prevalent and a fall in consumer confidence in September adding concern.

Asia and Emerging Market Equities

The OECD predicts growth in China to rebound to 5.1% this year, followed by 4.6% in 2024. Concerns over China’s economic recovery have persisted, with official figures released in September showing that China’s exports have fallen for a fourth consecutive month, amidst weak demand at home and abroad. Exports dropped by 8.8% in August compared with a year earlier and imports fell 7.3%. These declines surpassed expectations. As well as a slump in global demand for Chinese-made goods, the country is facing several post-pandemic challenges at home, including a property crisis and weak consumer spending. Asian markets have been negatively impacted by the stalling of the Chinese real estate sector.

The Japanese economy is projected to grow by 1.8% in 2023 before moderating to 1% in 2024. Strong service exports and improving wage growth are supporting GDP growth this year. India’s growth is projected to moderate from 6.3 to 6% next year. Brazilian GDP is projected to grow by 3.2% in 2023 and 1.7% in 2024, according to the OECD. Emerging market equities have largely underperformed developed markets, with consumer discretionary, utilities and communication service weakness detracting in some regions.


Brent crude is currently trading at around $95 a barrel. Tightening physical supplies are supporting oil prices, which have steadily climbed since late June amid output cuts imposed by OPEC+, unilateral production curbs from Saudi Arabia and export restrictions from Russia. Gold is currently trading at around $1,900 a troy ounce; the price has been subdued of late as markets brace for the prospect of interest rates staying elevated for longer.

Looking Ahead

Major global stock markets have had a mixed quarter, with key central bank policy meetings impacting as investors process regional inflation data and policy decisions. The backdrop remains uncertain, with divergent regional dynamics at play, asset diversification remains a vital component in any portfolio. Maintaining a long-term outlook, based on prudent risk management principles and strategic decisions, continues to be a key element for successful investing. Financial advice is vital, so please do not hesitate to get in contact with any questions or concerns you may have.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

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The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.