OECD Says Global Economy Hasn’t Been Hit by Brexit Vote

The outlook for the global economy hasn’t changed as a result of the U.K.’s vote to leave the European Union, according to leading indicators released Thursday by the Organization for Economic Cooperation and Development.

The Paris-based research body suspended publication of its gauge of future economic activity in July, saying the vote made it difficult to interpret a variety of data series that have a history of anticipating swings in future economic activity.

In advance of the vote, many economists worried an unprecedented decision by a large, developed economy to change its economic relationship with its neighbors could create high levels of uncertainty that would hinder growth in Europe and further afield.

But its composite leading indicators show that the vote to leave the EU has had little immediate impact outside the U.K.

“Although there remains uncertainty about the nature of the agreement the U.K. will eventually conclude with the EU, the volatility in data that emerged in the weeks immediately following the referendum appears to have reduced,” the OECD said.

Indeed, improved prospects for a number of large economies suggest the global outlook has brightened over recent months, easing worries that a sharp slowdown is under way at a time when policy makers appear to be low on ammunition with which to boost activity.

The OECD’s leading indicators, based on information available for July, now point to steady growth in most developed economies, including the U.S. But in contrast to the earlier months of 2016, they also point to pickups in a number of large developing economies, including China, Brazil and Russia.

via WSJ

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza