In a recent speech given in Tokyo, the head of the IMF stated that the outlook for the global economy is worse than expected. Christine Lagarde said that the state of affairs around the world is bleak and has extended well beyond the current crisis in the eurozone.

Not only did jobs in the United States not grow as expected, large emerging markets such as China have slowed as well. It had been forecast by the IMF back in April that 2012 would see a growth of 3.5pc whilst 2013 was projected to be at a growth rate of 3.1pc.

Unfortunately, within the past two months many global economies have stalled or deteriorated and as stated, United States and Chinese jobs creation has not met up with expectations. Within the next week or two the IMF is expected to release an assessment of growth which will have been updated to reflect these unexpected slowdowns.

Part of the basis for a reassessment is in the fact that US jobs only grew by 80,000 last month as opposed to the 90,000 which had been projected. Although it was higher than the previous month’s creation of 77,000 jobs, it is much lower than had been anticipated. When large global economies do not produce as projected, this has a dire impact on economies around the world.

Given the fact that this is much lower than the pre-crisis average of monthly growth, it is believed that the US Federal Reserve will implement another stimulus package to try to give the economy there a boost. It appears as though an unexpected rise in jobs earlier in the year gave false hopes and now these new fears are rippling through global economies, especially in the UK and the eurozone.

With Germany standing strong against further help for the troubled EU and confidence down, it appears as though worries for the global economy are well founded. Spain and Italy are the two countries which are currently causing a great deal of concern in the eurozone and France is right there amongst them. Even Germany’s bond yields have turned negative which will probably also be reflected in the IMF’s updated assessment.

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UK projected to lose position as sixth largest economy

In an ongoing battle of the economies around the world, it is projected that the UK will lose its status as the sixth largest global economy later this year to Brazil. The newest figures released by the Economist Intelligence Unit are based on GDP predictions.

According to the EIU, Brazil will have a GDP of $2.44 (USD) trillion whilst the UK will be just behind them with $2.43 trillion. Still the world’s leading economy, global measurements are based on the United States Dollar. Last year Brazil came into seventh place, bypassing Italy and this year it is projected that they will move up one more place supplanting the UK for sixth place.

Brazil’s upward climb is largely based on growth in their consumer class along with thriving trade with China that has a need for such commodities as iron ore and corn. Although the rising need for commodities in China are bringing Brazil quickly up the ladder of global economies, it is forecast that this will slow down at some point in the not so distant future.

Even so, all forecasts indicate that by the year 2020 Brazil will move into 5th place, overtaking Germany and by that time it is predicted that China will have supplanted the United States as the world’s leading economy. At that point, it is suggested that China will be in first place with the US right behind them in second place. After that, economists say that third and fourth places will be filled by India and Japan respectively.

If all these predictions come to pass, the UK will be in 9th place with France (8th), Russia (7th) and Germany (6th). Brazil is growing at a rate of 7.5% a year and their growth rate is expected to maintain momentum since they are one of the economies that have weathered the most recent debt crises.

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The ‘Occupy’ movement is further evidence of growing discontent

What started across the Atlantic in the ‘Occupy Wall Street’ protests has quickly spread to other major cities around the globe showing a growing discontent for the way in which government and big money are handling the debt crisis.

As reported by the Guardian, the only surprising aspect of the demonstration was that it took so long in the making. Discontent has been brewing since the beginning of the current debt crisis and banker bashing has become almost a way of life since the meltdown of 2008.

According to Tony Greenham of the Guardian, the reason the discontent is still with us and continues to grow is because of the fact that no one made an effort for a public enquiry into the crash that brought the global economy down in the first place. No one seems to put the interests of the common man (and woman) over the interests of big money in the financial institutions.

Banks are not being made to answer to the needs of the economy, they are allowed to answer to their own agendas. Of note might be the recent PPI scandal which rocked the UK. Had it not been for a super complaint lodged by a consumer advocate group, banks may still be stealing money from hard working borrowers in the name of insurance that was for all intents and purposes non-existent.

Is it surprising that there is a public outcry at this travesty of justice? The Guardian goes so far as to say that there isn’t a politician brave enough to take on the world of global finance which is why the problem continues to spin out of control.

Let one good man or woman step forward and perhaps the people will finally have the answers they deserve. In the meantime, the Guardian suggests we watch what is happening in Germany as they appear to be the one country that is unwilling to be coerced by global financial institutions and are doing what they need to do to protect their sovereign economy.

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IMF issues new warning on eurozone debt crisis

With less than two months before the G20 summit is to commence, the IMF is warning that stock markets can only be swayed by action from the European Central Bank. It is IMF’s contention that the ECB needs to light a fire under key financial markets in order to prevent a further intensification of the market turmoil that very well could prompt a double dip global recession.

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G7 Recognises Need to Act but Offer No Solutions

In their latest efforts to resolve the growing debt crisis in Europe, G7 agreed that they needed to act together. Unfortunately, this appears to be where their efforts ended. There has been no decision made on just ‘how’ they should act even though they unanimously agree that action is indeed called for.

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Vacancies in London Finance Industry down in August

With the latest numbers just being released, it is apparent that London’s finance industry has fewer vacancies than it had just a year ago in the same period of 2010. In August alone, jobs in the finance sector were actually down by 20% from the previous August and there is still double the amount of vacancies being produced than at the height of the most recent financial crisis in early 2009.

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