The global economy is now growing at its fastest pace since 2010, with the upturn becoming increasingly synchronised across countries, according to the latest OECD economic outlook.

This long-awaited lift to global growth, supported by policy stimulus, is being accompanied by strong employment gains, a moderate upturn in investment and an uptick in trade growth.

However, the report notes the lingering effects of prolonged sub-par growth in the aftermath of the financial crisis are still present. On emerging markets, the report warns that growth is hampered by slowing reform efforts and financial vulnerabilities from high debt burdens, particularly in China.

Financial risks are also rising in advanced economies, with the extended period of low interest rates encouraging greater risk-taking and further increases in asset valuations, including in housing markets.

In the meantime, according to flash data from Eurostat, eurozone inflation increased in November mainly due to higher energy prices. Consumer prices increased by 1.5 per cent year-on-year in November, following October’s 1.4 per cent increase. Inflation was forecast to rise to 1.6 per cent and continues to stay well below the European Central Bank’s target of ‘below, but close to two per cent’.

In the meantime, the jobless rate in the eurozone fell to 8.8 per cent in October, from 8.9 per cent the previous month, its lowest level since January 2009. This is further evidence that the buoyant economic recovery across the region is being felt across the currency bloc’s labour market.

Finally, in the US, Jerome Powell, President Donald Trump’s nominee to replace Federal Reserve chair Janet Yellen, signalled he intends to follow the same monetary policy course that his predecessor charted if he is confirmed as the central bank’s next leader.

Such continuity would be welcome in the markets, which don’t like uncertainty. Powell also told the Senate panel that he expects the central bank to continue raising interest rates gradually, indicating it is likely to raise rates in December. He also said that, eight years after Congress enacted a sweeping reform of Wall Street regulations, he believes that the rules are tough enough and it is time to take stock of those legislation.

This report was compiled by Bank of Valletta for general information purposes only.