Global briefing: Move fast & break things/ Chinese decoupling/ Brexit & Northern Ireland/ Global supply chains easing?/ Israel

Five notable things I'm watching this week

Move fast & break things: central bank edition

Since the start of 2022, US policy rates have increased by 450bp, in the Eurozone by 300bp, in the UK by 390bp, and in New Zealand by 400bp.  This speed and materiality of increase exceeds that in the years prior to the global financial crisis.

So far, most advanced economies have largely taken this in their stride.  GDP growth rates and labour markets have been resilient, even if some interest rate sensitive sectors (like real estate) have weakened.  But we may be reaching a point where things begin to break.

This would not be surprising.  Public and private sector debt levels are at very high levels across advanced economies, and growth models of firms and countries have been deeply shaped by the low interest rate environment of the past 15 years. Our 2023 outlook noted that ‘The persistently expensive cost of money will provoke and discover many macro risks’.

Indeed, the blow-up of Silicon Valley Bank (SVB) may be appropriate given that t…