Examining the global economic outlook, risks, and policy

Creon Butler and Neil Shearing discuss key questions affecting the global economy ahead of the 2021 G20 summit.

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Examining the global economic outlook, risks, and policy

— Creon Butler and Neil Shearing discuss key questions affecting the global economy ahead of the 2021 G20 summit.

As the UK budget – the main annual fiscal event – was just announced and the Chancellor was able to deploy the benefit of faster than previously expected growth to increase real public spending as well as reducing the growth in public debt, how far is this likely to be a general phenomenon among advanced economies, or is this situation unique to the UK?

The prospect of higher inflation globally now seems to be taken as a given, with central banks signalling a sooner than previously expected rise in interest rates. How big is the inflation risk in the short- and medium- term? And is there a risk this approach could kick off an inflation spiral?

The pair also discuss the potential for long-term scarring from the pandemic versus productivity gains from the rapid learning the world has achieved on new ways of working. With the G20 Summit focus likely to be on climate change and global health, should there be optimism on the outcomes in this areas, and how important would they be to market and business confidence in the short-term?