Prime Minister Johnson – Boris Johnson took the reins from Theresa May this week, and became the UK’s Prime Minister. After a long battle to gain control, PM Johnson got to work straight away, overhauling his cabinet with ministers who he thinks have the best chance of delivering a favourable Brexit outcome on the 31st October. In his first speech outside No.10 Downing Street, PM Johnson promised to get a better and fairer deal for the UK from Brussels, however, this was quickly dismissed by European Commission President Jean-Claude Junker who stated that the current deal is the only deal on the table.
IMF growth forecast – The International Monetary Fund, once again, lowered it’s global growth forecasts for 2019 and 2020. The IMF stated that the global downside risks had intensified, such as the US-China trade war, a disorderly Brexit, and further slowing of growth in the European Union. Forecasts for economic growth now stand at 3.2% in 2019, and 3.5% in 2020, which is a drop of 0.1% for both years from April’s forecast. This is the IMF’s fourth growth forecast downgrade since last October.
German data – Germany’s manufacturing Purchasing Managers’ Index figure came in this week at 43.1, down from 45. This was the lowest reading since 2012, and significantly below estimates. This reading is just one element of the composite PMI figure, which accounts for two thirds of the economy. The composite figure came in at 51.4, down from 52.6 in the previous month, which further indicates deteriorating growth in Europe’s largest economy.
European Central Bank (ECB) – The President of the ECB, Mario Draghi, decided that he would keep European interest rates at 0.00%. The Central Bank also signalled that they are willing to cut key interest rates in September for the first time since 2016, as they implement a policy shift aimed at buffering the eurozone economy.