Economic and financial risk insights - Global manufacturing weakness spreading to services sector

A growth slowdown is underway, with manufacturing weakness increasingly spilling over to the services sector. Our below-Consensus forecasts for real GDP growth in the US and Europe remain unchanged. Monetary policy easing will continue, but is becoming increasingly ineffective, particularly in the Euro area.

• Weakness in global manufacturing is deepening and increasingly spilling over to the services sector.
• Another Brexit delay remains our base case ahead of the 31 October deadline.
• We keep our below-Consensus forecasts for real GDP growth in the US and Europe unchanged.
• We expect two more rate cuts by the US Fed and slightly lower ECB rates, too. However, monetary policy is reaching its limit in the Euro area. Expect large-scale fiscal easing only if the downturn deepens.