$470 billion trade war looms over OECD's optimistic global outlook

$470 billion trade war looms over OECD's optimistic global outlook

And while eurozone growth is expected to ease off from 2.5% past year to 2.3% in 2018 and 2.1% in 2019, major continental economies like Germany and France are forecast to out-perform the UK.

City and academic economists expect the United Kingdom economy to expand at an annual pace of 1.5% over the next two years, and Chancellor Philip Hammond is expected to reveal a more optimistic outlook in updated official forecasts on Tuesday. Trade protectionism, however, remains a "key risk" to the world economy, according to the report.

The higher forecast was in part due to expectations that US tax cuts would boost economic growth there, it said.

Britain was seen missing out on the global upturn, lagging all other G20 countries with growth of only 1.3 percent this year.

The OECD forecast the USA economy would grow 2.9 percent this year and 2.8 percent in 2019, with tax cuts adding 0.5-0.75 percentage points to the outlook in both years. That's up from 3.7 per cent and 3.6 per cent respectively compared with its November projections.

Britain is set to miss out on buoyant global economic growth over the next two years, according to new forecasts by the Organisation for Economic Co-Operation and Development (OECD).

"In Japan, where underlying inflation and inflation expectations remain low, current stimulus measures need to be continued to help achieve the inflation target", the OECD said.

Sen. Jeff Flake introduces legislation to nullify Trump's plan to raise tariffs
The competing economic instincts that are dividing Trump from the rest of his Republican Party were on full display Thursday. Dan Simmons, president of United Steelworkers Local 1899 in Granite City, Ill., said they "will allow us to compete".

Alvaro Pereira, the OECD's acting chief economist, said: "US steel and aluminium tariffs will raise costs and harm consumers, while not solving the global overcapacity problem".

But its brighter outlook came with a major caveat in the wake of the US decision to slap import tariffs on steel and aluminum and the threat of retaliation by China, the European Union and others.

Growth will particularly be powered by private investment and trade picking up on the back of strong business and household confidence, the OECD said.

Mr Pereira said a global trade war would be harmful for the global economy.

In its interim economic outlook report issued Tuesday, the organization forecast global economic growth for this year at 3.9 percent, up from its previous suggestion of 3.7 percent.

"Governments should avoid escalation and rely on global solutions to resolve excess capacity in the global steel industry".

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