A key week for the world economy

 
Presidential contenders The US election is just one of several key events taking place this week

In the City they've dubbed it "the most important week of the rest of 2012". You can see why. If you were feeling dramatic, you could say that more than half of global GDP will be "in play", one way or another.

America will - we hope - decide on who will be its president for the next four years; the Chinese will start the formal handover to its new leaders, and the central banks of the eurozone and the UK will decide whether they need to do more to support their fragile economies.

Put it another way: the next few days will help determine the long-term economic direction of countries accounting for just over a quarter of global output. Those central bank meetings will also set short-term economic policy for countries that are responsible for another third.

Oh yes, and the Greek parliament will also be voting (probably on Wednesday) on further budget cuts that will determine whether it can get the next 31bn-euro tranche of its European-IMF rescue package. With widespread defections, it looks like the government will pass these measures only with the tiniest of majorities, if at all.

So, no pressure then.

The only event that the markets and everyone else have been completely ignoring is the meeting to which we would usually be paying most attention: the gathering of G20 finance ministers and central bank governors in Mexico which concludes later today.

There's a good reason for that lack of interest: the most important G20 finance minister, Tim Geithner, won't be there. Nor will the eurozone policy maker with most room to actually make policy - Mario Draghi.

They won't be writing bland communiques on the future of the global economy this week: instead they and everyone else will be watching a good chunk of that future forming, right before our eyes.

 
Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this
    +2

    Comment number 63.

    No50 prudeboy The bankers have already have made their move. Playing a major role in bringing the world's economy to its knees, existing now off the backs of taxpayer bailouts, planning their next assault on their customers and ensuring that they fund the governing party to guarantee no fundamental reform of their corrupt industry, and of course luxuriating in a pool of 'moral hazard'.

  • rate this
    +1

    Comment number 62.

    The US election wil be under question/suspicion from the moment is is allegedly finalized. The peculiar voting arrangements following Sandy will ensure there are questions, doubt. It is quite possible there will be no official win until well into November, if not December. In the tip is balanced the fiscal cliff.
    This election is the 2012 version of the hanging chad.

  • rate this
    +8

    Comment number 61.

    The world may be changing but the UK economy seems to have hit something of a brick wall as you can see below from the latest data.

    "The seasonally adjusted Index of Production fell by 2.6 per cent in September 2012 compared with September 2011...This is the 18th consecutive monthly fall on the same month a year ago."

    http://bit.ly/TtctFq

    So will we get more QE this week now?

  • rate this
    0

    Comment number 60.

    The world is changing and it is not for the better for the simple reason nobody knows what will be better.

    For the unemployed it will be better if there is work and for the low paid better wages. For the hungry it will be better if there was food.

    I doubt very much if the needs of the unemployed, the poorly rewarded and the starving will be in the thoughts of the great and good; just vote for me

  • rate this
    +1

    Comment number 59.

    Yes a big week! Will the Eurozone fudge again, or finally admit Greece is bust? O or R to face US fiscal cliff? New faces, but no real change in China? But I can't help thinking that the really big issue is that the US vote is aslo a referendum on a green light to Israel to set the Middle East on fire. Potential economic impact >> than the other 3. But only #8 & #10 have mentioned.

  • rate this
    +2

    Comment number 58.

    best news for the economy this week is that Nadine Dorries is in the jungle
    If she stays in till the end its a win win for the UK taxpayer as I hope she is giving her fee to charity, and will not draw any expenses for that time!
    why don't we send the entire upper and lower houses out there with her.

  • rate this
    0

    Comment number 57.

    @54 purple
    Think you may have accidentally added a few noughts?

    Do I recall correctly that the rate of population increase has recently slowed to the point where some futurologists are becoming concerned about maintaining the planet [ ;-) ] beyond the year 3500 .....

  • rate this
    0

    Comment number 56.

    @44
    Brief but not to the point ...

    ???

  • rate this
    0

    Comment number 55.

    54 Purple,

    So people are in over supply. Now what will we do about that?????

  • rate this
    0

    Comment number 54.

    Our difficulties are awkward to quantify , i'll try to in this way.

    China's miracle adds the equivalent investment of another England, each seven years. That is the entire structure of assests and investment and consumption. The population is some 1.3 trillion.

    Each 7 years the equivalent of England is added to China.
    Each 30 Years the planets population adds one trillion people.

  • rate this
    0

    Comment number 53.

    http://www.consilium.europa.eu//uedocs/cms_data/docs/pressdata/en/ecofin/133195.pdf

    Should be updated trade figures out shortly, i'm off to hunt up a few crows but don't expect to be plucking them..... hmmm. Blech......

    It's rather good to see that exec pay is up again.
    They don't mess about do they. 27% .... YIPPEE.
    Is it Jack Pot :) or Hi Jack! .......?

  • rate this
    0

    Comment number 52.

    We can thank the one above for EC innovation and their wholesome desire for accountability.

    http://beleuz.wordpress.com/2012/10/

    25 October 2012, Luxembourg

    The Council of European Union adopted new rules on financial regulation giving access to EU funds, applicable on 1 January 2013.

    Quite a bit going on here and a change of accounting, te hee....

  • rate this
    +1

    Comment number 51.

    @50

    You could call it a rigged market.

    BoE = private company, granted permission by HMG to invent money

    USA Fed Reserve = Privately owned bank.

    They call the tune, then the political puppets who happen to be in power at the time make gestures (living wage etc)

    Until we get away from money as debt 99% are doomed to servitude and placated with X factor.

  • rate this
    +2

    Comment number 50.

    Yep; most important week all right.

    The bankers will have to work out which way they will need to move in order to make their way in the world.
    You see it's much easier for them to make a pile on the back of other people making a pile.
    But one way or another the bankers will still make their pile.

    Either way the rest of us get the blame.
    Predetermined you see.
    By them.
    Just watch them.
    Sainted..

  • rate this
    0

    Comment number 49.

    Let's face it, the West had the Keys to the Kingdom, yet greed upon greed made their economies indebted to China. China's system isn't exactly transparent. So where does that leave the US, UK, and Europe?

    What a mess.

  • rate this
    0

    Comment number 48.

    Two thoughts,

    It will be a bumpy ride.

    I wonder what the meetings in Basel are up to this time, l haven't checked, l know that their little commitees on banking and insurance are all huddled up, declaring latest policy.

  • rate this
    0

    Comment number 47.

    It is so sad. Barac and Mit have such appaulling bad baggage and Wen has over $2b when most of his country get £5 per month and he tells them he is a communist.

  • rate this
    -1

    Comment number 46.

    Let's all print money until we get voted in again. We'll deal with the fall out later.

  • rate this
    0

    Comment number 45.

    When Barac became President, a Conservative MP posted on the Blue Blog "Isn't it great, the first black president." The comments were "but he's a socialist".

    My comment was; of course you win if you say "vote for me and 95% of workers will get a tax cut, NMW will be significantly increased and I will give you free healthcare."

  • Comment number 44.

    All this user's posts have been removed.Why?

 

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