Janet Mui: weekly economic update 14 February
China is gradually returning to work following the coronavirus shock. In the UK, there is speculation that the new Chancellor will usher in a period of higher government spending.
- President Xi has said that China remains committed to its industrial production targets as the country gradually gets back to work.
- Foxconn, a key supplier to Apple, is now running at 40 - 60% capacity.
- Rishi Sunak, the UK's new Chancellor of the Exchequer, is expected to be less of a "fiscal hawk" than his predecessor Sajid Javid. There is now speculation that the upcoming budget may include tax cuts rather than tax increases.
- UK GDP was flat in the fourth quarter of 2019, in line with expectations. Monthly data indicates that momentum improved in December, suggsting that the first quarter of this year should be stronger.
- Eurozone manufacturing remains very weak. The impact of the coronavirus on global supply chains will not help. However, we expect that activity will pick up over the course of the year.
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