Eurozone business growth slowed in November. Output growth by firms across the Eurozone decreased in November as a manufacturing slowdown spread to its dominant services sector, while Brexit uncertainty hindered British businesses, surveys showed. The final Eurozone Composite purchasing managers' index (PMI), considered a good guide to economic health, fell to 52.7 in November from October's 53.1, survey data from IHS Markit showed this week. The figure was the lowest since September 2016. PMI readings above 50 indicate expansion in the sector while those below 50 suggest contraction. Germany's PMI print fell to a 47-month low of 52.3 in November while Britain’s reading showed that the economy was at risk of contracting. The downbeat surveys will make grim reading for policymakers at the European Central Bank and Bank of England, as well as for British Prime Minister Theresa May as she tries to push through her Brexit plan through parliament.
Federal Reserve Beige Book positive on the economy but notes headwinds. Most of the Federal Reserve’s (Fed) 12 districts saw modest to moderate growth from mid-October through late November, although at least four districts reported slower growth, a tightening labour market and uncertainty about trade among manufacturers and farmers. The Beige Book is a compilation of anecdotal evidence on economic conditions in the 12 Fed districts released shortly before the central bank makes its decision on monetary policy. On the inflation front, the Beige Book said that prices rose at a modest rate in most districts, although a few noted moderate increases. Nearly all districts reported that input costs rose faster than price of final goods.
BOE chief warns against no-deal Brexit. Responding to questions from members of parliament at a hearing last Tuesday, Bank of England (BOE) Governor Mark Carney defended the central bank's analysis that a no-deal Brexit would cause a severe recession in the UK, the kind not even seen during the global financial crisis a decade ago. Mr Carney has been one of the loudest voices warning about the dangers of the UK crashing out of the European Union without an agreement. The BOE predicts that the economy could contract by as much as eight percent next year in the event of a no deal Brexit. House prices could rise by 30 percent and inflation could reach 6.5 percent as sterling plummets. The jobless rate could sour to 7.5 percent from 4.1 percent now and interest rates could be hiked sharply, the BOE warns
India central bank holds interest rates steady amid inflation worries. In its monetary policy meeting held this week, India's central bank left its key interest rate unchanged for a second consecutive session as it saw upside risks to the inflation outlook and maintained its policy stance of "calibrated tightening". The central bank decided to keep the repo rate unchanged at 6.5 percent. The decision was in line with expectations. The reverse repo rate was retained at 6.25 percent.