Find out How to Get Loans, Personal Loans, Business Loans, and More

Loan Issues

Global recovery remains muted

Standard Life Investments, a leading investment house, warns that the global economic recovery is still too muted to create inflation pressures in many countries. Significantly more quantitative easing would be required to meet central bank policy targets. |||

Standard Life Investments, a leading investment house, warns that the global economic recovery is still too muted to create inflation pressures in many countries. Significantly more quantitative easing would be required to meet central bank policy targets.

In the latest edition of Global Perspective, the global fund manager argues that to change inflation expectations permanently a much larger monetary response is needed from the US and Western authorities than that already announced. This is based on research by Standard Life Investments that shows that inflation will stay low in the short and medium term because of sizeable excess capacity in developed economies, leading to GDP growth that in many countries is uncomfortably weak for this stage of the business cycle.

Richard Batty, Global Investment Strategist, Standard Life Investments, said:

“In the short run disinflationary forces in western economies, especially the US, appear too powerful to be overwhelmed by the recent loosening of monetary policy which is unlikely to boost economic capacity. Additionally, the chance of any further fiscal loosening appears constrained by the ballooning of national budget deficits. This suggests the policy response in the short term is unlikely to cause inflation.

“To change inflation expectations permanently, we believe that a much larger monetary response would be needed from the US and Western authorities than that already announced. In summary, if central bankers decide that higher inflation must be engineered, then investors should anticipate another phase of extraordinary policy measures through QE3.”

Standard Life Investments was launched as an investment management company in 1998. It is a wholly owned subsidiary of Standard Life Investments (Holdings) Limited, which in turn is a wholly owned subsidiary of Standard Life plc. – Staff Reporter

View full post on All Stories

Comments are disabled.