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The key points from today’s economic news, brought to you by Guardian Stockbrokers.
OECD forecasts global economy to contract 6.0% in 2020
The Organisation for Economic Cooperation and Development (OECD) forecasted that the global economy would contract 6.0% this year, recording the biggest peace time downturn in a century, while the global economy will grow by 5.2% in 2021. Further, the OECD predicted that the US economy will contract 7.3% this year before growing 4.1% next year. The UK economy is forecasted to contract 11.5% this year before recovering 9.0% next year.
UK house price balance dropped in May
In the UK, house price balance eased to a level of -32.00% in May, compared to a revised reading of -22.00% in the previous month. Market expectations were for house price balance to drop to -24.00%.
Fed holds interest rates steady, sees no rate hike until 2022
The US Fed, in its latest monetary policy meeting, decided to hold key interest rates steady at near-zero in order to support a post-COVID economic recovery by keeping rates at the lower bound through at least 2022. Meanwhile, the policymakers projected that the US economy will shrink 6.5% in 2020, while showing a growth of 5.0% in 2021 and 3.5% in 2022.
US CPI rose less than expected in May
In the US, the consumer price index (CPI) recorded a rise of 0.10% on a YoY basis in May, compared to an advance of 0.30% in the prior month. Markets were expecting the CPI to climb 0.20%.
US budget deficit fell in May
In the US, budget deficit fell to $399.00 billion in May, from a budget deficit of $738.00 billion in the previous month. Markets were expecting the budget deficit to fall to $650.00 billion.
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