Ian Campbell taught English at the Université de Poitiers before studying economics. He was Chief Economist, Emerging Markets at ABN AMRO Bank, Head of Latin American Research at BancBoston Securities and Regional Director, Latin America at the Economist Intelligence Unit. Since becoming a journalist in 2000 he has written for The Washington Post, The Times, The Independent, The Economist, The Globe and Mail, The Chicago Tribune, The New Statesman and other publications. From 2000 to 2003 he was Economics Correspondent for the UPI press agency. He has recently returned to the UK, where he is writing a book on rural Mexico.
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The headline - 0.8 percent second-quarter growth - sounds good. But construction shrank and industrial production was weak. Only services were strong. It sounds like a warning of future problems. Expectations of a UK interest rate rise may be delayed, leading the pound down.
Portuguese worries have taken Europe’s shares off their highs. But investors haven’t fully registered a deceleration in the region’s big economies – including Germany. The softening may partly reflect the crisis in Ukraine. Either way, policymakers have no easy remedy.
Falling prices can be positive. In Britain, shrinking shop prices encourage consumption and may delay rate rises. In euro zone countries where unemployment is high and competitiveness weak, falling prices reflect structural flaws and may depress rather than stimulate.
- U.S. inflation poses threat to 2007-style market calm
- UK's hawkish shift is dangerous
- Iraq insurgency adds to stagflation risks
- Blunt instrument is needed for global house bubble
- Emerging markets slow even with tide on their side
- Only the Fed can sink the euro
- UK housing bounce obscures a credit-lite recovery