Latest news with #PantheonMacroeconomics'
AU Financial Review
4 days ago
- Business
- AU Financial Review
ASX to rise, Wall St lifts on EU-US trade hopes, consumer data
Australian shares are set to open higher, tracking gains in Europe and the US on hopes that the EU and the US are on a path towards resolving US President Donald Trump's trade demands. In a social media post, Trump said he was encouraged to hear that EU negotiators were accelerating talks with their US counterparts. Separately, Wall Street's mood was lifted by a Conference Board report showing renewed optimism among US consumers. All 11 of the S&P 500 industry groups were higher in early afternoon trade. The board's Consumer Confidence Index increased by 12.3 points in May to 98.0, up from 85.7 in April – well above a consensus estimate for 87. The Present Situation Index —based on consumers' assessment of current business and labour market conditions—rose 4.8 points to 135.9. The Expectations Index —based on consumers' short-term outlook for income, business, and labour market conditions—surged 17.4 points to 72.8. 'The rebound is striking, and tempered only partially by the fact that the survey window, which closed on May 19, will have picked up the improvement in sentiment due to the trade truce with China,' Pantheon Macroeconomics' Oliver Allen said. Santander's Stephen Stanley said that while the book is far from closed on tariffs, financial markets seem ready to move past it, and the latest Conference Board data 'suggest that households may be moving in that direction as well'. Market highlights ASX futures are pointing up 40 points or 0.5 per cent to 8477. All US prices are as of 1.30pm New York time. Today's Agenda Goodman Group is scheduled to report quarterly results, while Web Travel is on deck for full-year results. Fisher & Paykel Healthcare and Infratil also are set to report annual financials. Local investors will be focused on the April CPI indicator. eToro's Josh Gilbert said the indicator has remained stable at 2.4 per cent for the past two months, and :we're likely to see the CPI for April remain stable or even slow down to 2.3 per cent (which is the consensus estimate), despite Trump's 'Liberation Day' tariffs temporarily reigniting inflation concerns. 'If April's CPI does come in at 2.3 per cent, it's a sign that disinflation is once again resuming after a stable few months and that Trump's tariffs have had minimal impact on local consumers.' Across the Tasman, the RBNZ is widely expected to cut its key rate by 25 basis points at Wednesday's policy meeting. The decision will be announced at 12pm. Top stories 'No data centre strategy': Industry slams NSW's Macquarie Park ban | The decision to prohibit new data centres at Macquarie Park is the latest flashpoint as governments and regulators try to manage sector's runaway growth. | Woodside and Santos bosses have warned that ideological opposition to gas projects is scaring off investment and risks undermining Asia's energy transition. | The future of the failed private hospital giant is partly in the hands of five Chinese state-owned banks and asset managers which control a fifth of its debt.
The Independent
03-04-2025
- Business
- The Independent
UK economic growth to be slower than forecast due to tariffs, say economists
UK economic growth could be up to 0.5 percentage points lower than expected in the coming years due to US President Donald Trump's tariff plan, economists have warned. In his 'liberation day' announcement, Mr Trump slapped a 10% tariff on US imports of UK goods, as he hit out at 'exorbitant' VAT rates. It came as he announced heavier tariff plans on a raft of other countries, including a 20% tariff on imports from EU nations. Nevertheless, UK car manufacturers will be hit by a 25% tariff on all foreign cars imported to the US, which experts have said could put 25,000 UK jobs at risk. Experts stressed that the UK has avoided a 'direct blow' but will still face a 'significant' impact. Thomas Pugh, economist at RSM UK, said: 'The direct impact on the UK is likely to be in the 0.2% to 0.5% of GDP range over the next few years combining both the impact of the 10% flat tariff and the 25% tariff on automotives. 'The impact will be bigger once the hit to the US and European economies becomes clearer and is taken into account. 'Given we expect growth of 1% this year and 1.5% next year, it implies another year of stagnation at best.' He added that he believes the impact of the tariffs will be 'not far off' wiping out Chancellor Rachel Reeves' fiscal headroom in the next budget in the autumn. Pantheon Macroeconomics' Rob Wood suggested the economic impact would be less heavy but indicated it could result in more cuts to interest rates. 'Surging uncertainty ahead of President Trump's tax salvo had already been weighing on growth and the UK got away relatively lightly with a 10% tariff,' he said. 'For now we shave our 2025 growth forecast to 0.9%, from 1.1% previously. 'Markets are right to price in more UK rate cuts in 2025 – 2.4 more cuts now expected, compared to 2.0 three days ago – given that we have seen growth damaging tariffs and little retaliation, which would boost near-term inflation and create more of a stagflationary supply shock outside the US.' Economists have said the UK currently exports around £60 billion in goods to the US, including pharmaceuticals, cars and technology equipment. Experts have indicated the impact of the tariff plans will not be as bad as many had feared. The UK's official economic forecaster, the Office for Budget Responsibility, warned last month that a more severe scenario, in which the UK and other nations also retaliated to the imposition of tariffs, would have dragged UK GDP 0.6 percentage points below forecasts this year. It had said this would have had a one percentage point impact next year, and 'almost entirely eliminate' the Chancellor's £9.9 billion headroom against her fiscal rules. Economists said UK firms still face significant uncertainty despite avoiding the 20% tariff scenario that some had feared. Barret Kupelian, chief economist at PwC, said: 'The UK avoided a direct blow – but the global economy has taken a substantial hit. 'For the UK, the impact is significant – though less severe than for some other countries. 'In the short term, businesses face a sharp rise in uncertainty.' UK business leaders have called for the UK Government to avoid further escalation in order to limit the economic impact of the policy announcement. Rain Newton-Smith, chief executive of the CBI (Confederation of British Industry), said: 'A cool and calm reaction from the UK Government is the right response: UK firms need a measured and proportionate approach which avoids further escalation. 'Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices.'
Yahoo
03-04-2025
- Business
- Yahoo
UK economic growth to be slower than forecast due to tariffs, say economists
UK economic growth could be up to 0.5 percentage points lower than expected in the coming years due to US President Donald Trump's tariff plan, economists have warned. In his 'liberation day' announcement, Mr Trump slapped a 10% tariff on US imports of UK goods, as he hit out at 'exorbitant' VAT rates. It came as he announced heavier tariff plans on a raft of other countries, including a 20% tariff on imports from EU nations. Nevertheless, UK car manufacturers will be hit by a 25% tariff on all foreign cars imported to the US, which experts have said could put 25,000 UK jobs at risk. Experts stressed that the UK has avoided a 'direct blow' but will still face a 'significant' impact. Thomas Pugh, economist at RSM UK, said: 'The direct impact on the UK is likely to be in the 0.2% to 0.5% of GDP range over the next few years combining both the impact of the 10% flat tariff and the 25% tariff on automotives. 'The impact will be bigger once the hit to the US and European economies becomes clearer and is taken into account. 'Given we expect growth of 1% this year and 1.5% next year, it implies another year of stagnation at best.' He added that he believes the impact of the tariffs will be 'not far off' wiping out Chancellor Rachel Reeves' fiscal headroom in the next budget in the autumn. Pantheon Macroeconomics' Rob Wood suggested the economic impact would be less heavy but indicated it could result in more cuts to interest rates. 'Surging uncertainty ahead of President Trump's tax salvo had already been weighing on growth and the UK got away relatively lightly with a 10% tariff,' he said. 'For now we shave our 2025 growth forecast to 0.9%, from 1.1% previously. 'Markets are right to price in more UK rate cuts in 2025 – 2.4 more cuts now expected, compared to 2.0 three days ago – given that we have seen growth damaging tariffs and little retaliation, which would boost near-term inflation and create more of a stagflationary supply shock outside the US.' Economists have said the UK currently exports around £60 billion in goods to the US, including pharmaceuticals, cars and technology equipment. Experts have indicated the impact of the tariff plans will not be as bad as many had feared. The UK's official economic forecaster, the Office for Budget Responsibility, warned last month that a more severe scenario, in which the UK and other nations also retaliated to the imposition of tariffs, would have dragged UK GDP 0.6 percentage points below forecasts this year. It had said this would have had a one percentage point impact next year, and 'almost entirely eliminate' the Chancellor's £9.9 billion headroom against her fiscal rules. Economists said UK firms still face significant uncertainty despite avoiding the 20% tariff scenario that some had feared. Barret Kupelian, chief economist at PwC, said: 'The UK avoided a direct blow – but the global economy has taken a substantial hit. 'For the UK, the impact is significant – though less severe than for some other countries. 'In the short term, businesses face a sharp rise in uncertainty.' UK business leaders have called for the UK Government to avoid further escalation in order to limit the economic impact of the policy announcement. Rain Newton-Smith, chief executive of the CBI (Confederation of British Industry), said: 'A cool and calm reaction from the UK Government is the right response: UK firms need a measured and proportionate approach which avoids further escalation. 'Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices.'
Reuters
18-03-2025
- Business
- Reuters
Chile's economy slows in Q4 but full-year growth beats estimates
SANTIAGO, March 18 (Reuters) - Chile's economy slowed in the fourth quarter of 2024 from the previous three months but gained steam compared to a year earlier and full-year growth exceeded official estimates, data released by the central bank showed on Tuesday. The figures were published ahead of a key interest rate-setting meeting on March 21 at which policymakers are widely expected to hold borrowing costs at 5.0%, as they call for caution amid sticky consumer price inflation. The world's largest copper producer saw gross domestic product rise 0.4% in the fourth quarter from the previous three-month period, the bank said, a touch below the 0.5% growth expected by economists in a Reuters poll. GDP growth slowed from the previous quarter's 1.5% expansion as mining activity shrank, but was partly offset by higher services and agricultural activity. "More timely monthly activity data suggest that the economy headed into 2025 with more momentum. This, combined with above-target inflation, means that the central bank is likely to stand pat on Friday," Kimberley Sperrfechter of Capital Economics said. On an annual basis, Chile's economy grew 4.0% in the fourth quarter, beating the Reuters poll forecast of 3.7% growth. Chile last year regained momentum after a weak 2023 on the back of interest rate cuts. The central bank in January paused an easing cycle amid inflationary concerns after delivering a total 625 basis points of cuts since July 2023. In 2024 as a whole, the Chilean economy expanded by 2.6%, boosted mainly by exports, with internal demand growing 1.3%. Full-year growth stood above the 2.3% the central bank had projected in December and marked an acceleration from the previous year's 0.5%, as well as the strongest expansion since the post-pandemic rebound in 2021. Pantheon Macroeconomics' chief Latin America economist Andres Abadia said that Chile ended the year on a solid footing as domestic demand showed resilience, adding that growth might accelerate this year on strong private consumption. "But risks remain tilted to the downside, given volatile external conditions and still-tight financial constraints, with policymakers having little room for maneuver in the near term." Chile's government last month forecast GDP to grow 2.5% this year, while average inflation was estimated at 4.7%, still above the official 2% to 4% target range.
