UK Business News
U.K economic growth has slowed to 0.5% in the last quarter highlighting the fragility of the economic recovery. However, the International Monetary Fund (IMF), has said recently that it forecasts that the UK is likely to be the best performing of the G7 economies – ahead of Germany and the United States.
London has been voted by over 100 organisations, such as the World Bank, as the most important financial centre this year, overtaking New York’s Wall Street. This announcement is a huge boost for the City of London highlighting its economic power on global financial markets. Indeed, as roughly half of all global investment capital passes through the City in one year, the influence of London’s financiers has global significance.
Bad news for the London property market, the capital has been categorised as the world’s worst housing bubble. The Swiss bank UBS has said that the ratio between house prices and incomes has soared significantly. This means that the figures which form the ratio are now too detached with property values increasing much faster than earnings. UBS has warned that London’s property market is so overheated, the capital faces a substantial price correction. The second worst on its Global Real Estate Bubble Index is Hong Kong at 1.67, compared to London’s 1.88. The bank states that any city above 1.5 is at risk of a housing bubble.
International Business News
Germany’s economic growth has been weakened predominantly due to the diesel emissions rigging scandal at Volkswagen. The news is particularly bleak as several countries are now launching investigations into the motor corporation to find out whom authorised the rigging devices to be fitted. Substantial fines are likely to be imposed by several nation’s consumer regulatory boards further damaging Volkswagen and the German economy.
As an update to Nouse Business recent analysis of the BRICS economies, the IMF have forecast that the Brazilian economy is likely to contract by 3% this financial year indicating the poor economic performance of Brazil. With the rest of the BRICS experiencing slowing growth, Brazil’s outright contraction is particularly damaging for the embattled Brazilian President Ms Rousseff, who has not recovered from the recent Petrobras corruption scandal. With unemployment and inflation increasing, drastic action is needed by the Rousseff administration to return the Brazilian economy to growth.