The global economy has continued to expand at well above its trend growth rate since the beginning of 2017, but there have been some early signs of a slackening in recent weeks. According to the latest monthly results from the Fulcrum nowcasts, global growth is now running at 4.1 per cent (at PPP exchange rates), which is about half a percentage point lower than a month ago.

This “slowdown”, which has been driven by the US and China, is well within the normal range of monthly fluctuations in the global nowcast, and it may be nothing more than a temporary blip. There are some legitimate reasons for concern about the slowdown in China, which seems to be connected to tighter credit polices. Fortunately, however, the Chinese economy seems in better shape to absorb this tightening than it was in 2013-15.

Since the American Presidential election in November 2016, much of the attention of investors has been focused on the US economy, which is usually seen as the litmus test for the “global reflation theme”. The nowcasts have identified a strong surge in US growth, starting in September 2016 and peaking at over 4 per cent in March 2017.