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By debating the size of their balance sheets, central banks are showing for only the second time since 2008 that they may be worrying about our addiction to QE.

With things turning brighter - for more reasons than one this spring - Eoin and Neil discuss how strong economic recovery will be, whether further stimulus is required, what could go wrong, and where now for policy and markets.

In his latest Economic Outlook, Senior Economic Adviser Neil Williams summarises his expectations for the global economy.

Join Eoin Murray, Head of Investment, and Neil Williams, Senior Economic Adviser, for a lively discussion as they look to 2021 and beyond.

In his latest Economic Outlook, Senior Economic Adviser Neil Williams summarises his expectations for the global economy in five main points.

Neil Williams examines the impact that various pandemic-related stimulus packages have had on both global government debt and the efficacy of monetary and fiscal tools available to policy-makers.

The US and UK are already running highly negative interest rates, when QE is considered, according to a report by the International business of Federated Hermes.

Why stimulus measures should be combined with efforts to tackle climate change

In hard macro terms, the tragic spread of the coronavirus provides another argument for keeping policy rates close to the floor, and the ‘punch bowl’ of central-bank liquidity filled.

This marks the tenth anniversary of our quarterly Economic outlook.

Neil Williams, Senior Economic Adviser, Hermes Investment Management: “After softer activity data, the BoE's rate-hike today, their second in this cycle, may raise some eyebrows. However, it shouldn't be seen as heralding a swift move upwards. “As with their first rise last November, the Bank's tone again reflects caution. Suspecting that its room to manoeuvre will become more constrained as Prime Minister May seeks a Brexit Treaty in 2019, it may be putting as much store on tactics as long-term strategy. Even if there is a deal next year, it would most likely only be a precursor to sorting out the various legal and trade systems by December 2020. “Motivating today's move will be the MPC’s assessment of very little slack left in the economy, and building excess demand. It will also be hoping that spring’s pay settlements data have been strong enough to help validate the traditional link with low unemployment. “Yet, their window to hike may become smaller in 2019, and even close by 2020. UK growth has almost ground to a halt - from the top of the G5 quarter-on-quarter growth-table in H2 2016 (just after the referendum) to the bottom by H2 2017 - despite a softer fiscal stance.”

To test whether the macro strains in the eurozone periphery are still holding back the core members, Neil Williams, Senior Economic Adviser to Hermes Investment Management, updates his ‘Misery Indices’ (MIs) out to 2019. He finds that, with macro-economic convergence between euro members next year set to be the strongest since 2007, they should be on a better footing to weather their next challenge - linked perhaps to Italy’s political risk. Off-the-wall methods for proxying economic hardship include an index adding together a country’s unemployment and inflation rates. Though hardly scientific, they become especially flawed in a low inflation or deflationary world when the components may move in opposite directions. We offer a more logical alternative to this, and to GDP estimates, which are produced with more of a time lag and frequently revised.