The Daily Update - Japan Real Wages / Global Growth / Brexit Ball

In Japan, real wages, adjusted for inflation, fell for the eighth month in a row in August, pointing to further strains on consumers ahead of the government raising the rate of sales tax earlier this month. The Japanese government finally rolled out the sales tax on 1st October. It had been delayed twice before this as steps were taken to try to ease the increase from 8 to 10 per cent with tax breaks and vouchers over fears increasing the tax will hurt an already struggling economy. The Labour Ministry data showed that real wages dropped 0.6% in August from a year ago, with a revised 1.7% annual drop in July.

We also read that David Malpass, the World Bank President, has given warning that the outlook for the global economy is deteriorating due to a number of factors including the headwinds in Europe, Brexit uncertainty and ongoing trade tensions. In June the bank forecast that the world economy would grow by 2.6% in 2019, however, due to the deteriorating outlook, that figure now looks optimistic. The IMF is due to release its update next week for global growth. In July it projected 3.2% growth, a figure that is expected to be slashed.

Lastly, Boris Johnson has told the EU that the Brexit ball ‘was in its court’ as he urged the bloc to discuss the details of his proposals for breaking the Brexit deadlock. After reiterating his position that the UK will leave the EU on the 31st October, Johnson said: ‘What we’re saying to our friends is that this is a very generous, fair and reasonable offer we’ve made. What we’d like to hear from you now is what your thoughts are’, adding, ‘If you have issues with any of the proposals that we’ve come up with, then let’s get into the details and discuss them’.

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