Since sweeping to power in October elections, Poland’s Eurosceptic and authoritarian new government has packed the constitutional court with its appointees, skewed the court’s voting system and passed a law tightening its control on top media posts — all in the country supposed to be one of the bulwarks of democracy in east Europe. Today the European Commission will debate what to do with Poland: it is likely for now to hold back from triggering possible sanctions against Warsaw but will discuss ways of subtly increasing the pressure.
At this stage, it is hard to quantify how a planned referendum on Britain’s membership of the European Union is impacting investor sentiment and the outlook for business investment. But there is little doubt it will influence the timing of the Bank of England’s first interest rate hike in nearly a decade and how sterling trades this year.
Chinese manufacturing has been in the dumps for a long while. But that was supposed to be offset by a government-induced shift in the economy toward domestic consumption, which underpins Beijing’s optimistic outlook for growth this year.
European stock markets may have had a rough start to 2016, but the first major European data releases of the year, covering momentum in manufacturing at the end of 2015, have been particularly good by recent standards.
British banks survived the Bank of England’s 2015 stress tests largely unscathed, but the assessment published earlier this month also underscored the vulnerability of the UK banking system to China.
The world economy may be set for another year like 2015, with modest growth in developed economies offsetting persistent weakness elsewhere but generating very little inflation and keeping interest rates low.
San Francisco Federal Reserve President John Williams earlier this year got so sick of answering reporters’ questions about when the U.S. central bank would raise rates that he had his son design a Tee-shirt that he could just give out.