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Our views 19 February 2024

(Gradual) rate cuts, lacklustre growth - Investment Clock economic update

30 min read

I am expecting 2024 to be neither a great nor awful year for the global economy. European GDP growth starts the year looking flat to lacklustre and the recent pace of US GDP growth looks unsustainably strong.

I have not pencilled in strong growth in major developed economies and expect a weaker patch at some point this year in the US, but I no longer assume even a mild technical recession there. Inflation should fall further this year, with services playing a larger role than before. That should help give central banks the confidence to cut rates, though gradually rather than sharply in the absence of significant recessions. However, there is a fair bit of disagreement among economists about what this year will look like and plenty of risk to central forecasts.

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The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.