The media and financial markets have tried to make sense of a number of key themes in the past twelve months, including:
- The only modest rise in GDP global growth, major central banks’ reluctance to tighten monetary policy and the Fed’s glacial pace of rate hikes despite the improvement in the US labour market ;
- Donald Trump’s surprise election victory in the November US presidential elections;
- The Brexit referendum vote in the UK; and
- The rise of nationalism and populism in Europe.
Clearly a number of interconnected, sometimes self-reinforcing country-specific as well as global economic, financial, political, social and demographic factors have contributed to the shifting landscape which markets, companies, households and policy-makers face. But slowing real wage growth in developed economies, including the US, UK, Eurozone and Australia, has been a critical common denominator, in my view.
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