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  • Neil Williams
    In his latest Economic Outlook, Senior Economic Adviser Neil Williams summarises his expectations for the global economy.
  • Neil Williams
    In his latest Economic Outlook, Senior Economic Adviser Neil Williams summarises his expectations for the global economy in five main points.
  • Neil Williams
    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.
  • Neil Williams
    In his latest quarterly Economic Outlook, Neil Williams, Group Chief Economist at Hermes Investment Management, points out that ten years after the first glimpse of the financial crisis, and major economies have finally recouped their GDP (Chart 1, below). Even Japan, whose deflationary crisis originated two decades earlier and Italy, hamstrung by the euro, are back to ‘square one’. Arguably, most of the macro effects from the crisis were not registered till 2008, which then triggered a round of monetary stimulus – conventional and unorthodox – unparalleled since the 1930s.
  • Neil Williams
    In his May issue of Ahead of the Curve, Neil Williams, Group Chief Economist at Hermes Investment Management, discusses his view that while markets are still taking a ‘glass-half-full view’ of the world, protectionism is the new risk emerging. This he argues, suggests we face a year of two halves – where stimulus-euphoria gradually gives way to stagflation concern. Helpfully, though, the trade-off is that central bank policy rates stay lower than many expect. Amid this, the US Federal Reserve remains the test case for whether central banks can ever ‘normalise’ policy interest rates. We expect it to try, but fail – peaking out at a far lower policy rate (1¼-1½%) than in past US recoveries.
  • Neil Williams
    Neil Williams, Group Chief Economist at Hermes Investment Management, sets out his reaction to today’s Spring Budget: Having set out his stall in November and still awaiting the main event – our Brexit negotiations - the chancellor’s fiscal tweaks today were never going to raise too many eyebrows. Sterling’s fall since the Brexit vote has so far cushioned the economic blow, allowing him a sunnier growth outlook for this year, and more optimistic tax-take.
  • Neil Williams
    The ECB’s decision prior to Christmas to extend QE for another nine months to December 2017, though ‘taper’ it from this April, does not herald an early tightening of economic policy, according to Group Chief Economist Neil Williams in his January Ahead of the Curve. Quite the opposite in fact, with the key deposit rate likely to stay negative in 2017, and the fiscal side activated. 2017’s extra QE easily surpasses the combined GDPs of Greece & Portugal... Tapering means more QE. By tapering its monthly asset purchases from €80bn to €60bn, it’s still looking to inject an extra €540bn in QE. This easily surpasses the combined GDPs of Greece and Portugal. Central banks can now buy bonds that yield lower than the -0.4% deposit rate. However, the nuance, is Mr Draghi’s growing encouragement of governments to take the baton back from the ECB. A lesson from Japan is that QE provides cash to lend, but cannot force consumers and firms to borrow. The euro-zone thus looks halfway down the Japan route. It too may be running unconventionally loose monetary policy (QE and negative rates) to get its currency down, but has yet to let go of the fiscal reins.
  • Neil Williams
    Some today will be disappointed that Mr Draghi is planning to taper the ECB’s QE from next April. But Neil Williams, Group Chief Economist at Hermes Investment Management, believes they shouldn’t be. First, tapering means more, not less, QE, and even though he’s closing the tap a notch in April, the ECB’s liquidity sink is still filling up. By tapering its monthly asset purchases from €80bn down to €60bn, he is still looking to inject an extra €540bn in QE. To put this into perspective, this easily surpasses in equivalent terms, the combined GDPs of Greece and Portugal for example.
  • Neil Williams
    In his latest quarterly Economic Outlook, Looking into 2017, Neil Williams, Group Chief Economist at Hermes Investment Management, sets out the six core beliefs that lie behind his macro view of 2017. After a year of political surprises, we could see tectonic shifts in economic policy. Speculation, rightly, that major economies will open their fiscal box is currently causing ‘reflation trades’ to puff up growth assets, raise inflation expectations, and make the 30-year bull-run in government bonds look even staler.