BoE Governor Mark Carney noted in a speech today that global growth momentum is now “weakening in all major regions” and “downside risks have intensifed”. Also, the proportion of the global economy growing above trend has fallen from four-fifths to one-third.

Tighter financial conditions could be part of the reaons for the deceleration. But he warned, “potentially more seriously, the slowing in global momentum may also be the product of rising trade tensions and growing policy uncertainty.” And, “risks from China and from de-globalisation are significant and growing.” Carney also emphasized “contrary to what you might have heard, it isn’t easy to win a trade war.”

He added that Brexit is the “first test of a new global order”. It could be the “acid test” of “whether a way can be found to broaden the benefits of openness while enhancing democratic accountability.” And, Brexit can also lead to “new form of international cooperation and cross-border commerce built on a better balance of local and supranational authorities.”

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Full speech “The global outlook”.

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