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World Economy

OPEC Monthly Oil Market Report – November 2017


The underlying positive momentum has led to an upward revision in the 2017

GDP growth

forecast for the

Euro-zone, which now stands at 2.3%, compared with 2.2% in the previous month. Consequently, the 2018

GDP growth forecast was lifted to 2.1%, compared to the previous month’s estimate of 1.9%. Political

uncertainties, Brexit procedures, as well as monetary policies remain important factors to monitor.


Despite the sixth round of


negotiations, the progress made since the initiation of the so-called Article

50, which kicked off the 2-year Brexit negotiation period, has been limited. A major question is the level of

the break-up cost that the EU is requesting the UK to fund. This is estimated at around €60 bn. It now

appears that the UK is offering less than a half of this amount, which will make further progress in the

negotiations very challenging. Moreover, the discussion of the Ireland-Northern Ireland border has re-

emerged, yet another complicated topic in the negotiations. In the meantime, economic activity continues to

slow down, but seems to have stabilised to some extent. Some parts of the economy continue to do very

well, particularly the export-oriented industries that benefit from the low pound.

After both quarters in the 1H17 have now been confirmed to have grown by only 0.3% q-o-q SA, growth in

3Q17 has picked up to 0.4% q-o-q SA. Changes in household expenditure were reported at a low level of

only 0.2% q-o-q growth, the lowest level in almost three years, while investment has picked up, to rise by

0.6% q-o-q SA, albeit from very low levels. The unemployment rate remained surprisingly low, falling to 4.2%

in July, from 4.3% in June and 4.4% in May. Wage growth continued at a relatively solid level of 2.2% y-o-y

in August, compared with a low level of 1.6% y-o-y in July. As inflation remained high at 3.0% y-o-y in

September, the Bank of England raised its key-policy rate for the first time in more than 10 years, by 25 bp in

its latest meeting in November. At the same time, it voiced concern about the relatively high debt levels of

private households in the UK, as interest rates may go up further in the near future.

In connection to most recent economic developments, the


for manufacturing picked up again, pointing at

a continued positive trend to rise to 56.3 in October, compared with 55.9 a month earlier. The very important

services sector, which constitutes the majority of the UK’s economy, rose even more considerably to 55.6 in

October, compared with 53.6 in September and 53.2 in August.

Graph 3 - 7: UK inflation

Graph 3 - 8: UK PMIs

With indicators pointing to a gradual slowdown in the UK economy, a trend that has already been reflected in

the GDP growth forecast numbers, the

GDP growth

forecast remains unchanged at 1.5% for 2017. Growth

in 2018 is forecast at 1.4%.







Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

Sources: Office for National Statistics and Haver Analytics.

% change y-o-y









Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17

Oct 17


Sources: CIPS, IHS Markit and Haver Analytics.

Services PMI

Manufacturing PMI