Global PulsePoint

Executive Summary 

23 September, 2025 - The global economy is closing Q3 with fragile momentum and increasingly uneven dynamics. The United States is cooling, the euro area is stabilising at low levels, the United Kingdom remains constrained, and China is showing renewed deflationary pressure. Inflation progress is mixed. The Federal Reserve cut rates in September, while the ECB and Bank of England held, and China’s stance remains accommodative. Trade frictions from US tariffs imposed in August continue despite frameworks with the EU and Japan that reduced escalation risk but raised compliance costs.

The practical consequence is that conditions now vary more widely across markets. Different monetary policies, uneven inflation, and higher costs for cross-border trade are creating an environment where predictability is scarce and decisions about where and how to deploy capital, manage supply chains, and expand operations are influenced as much by politics as by economics.

Signals to watch in October

• Diverging rate paths— The Fed has started to ease while the ECB and BoE are holding, creating sharper currency swings around data and decisions.
• Inflation as a competitiveness factor— The US and euro area are near target, the UK remains high, and China is negative. Relative inflation will shape policy space and real income paths.
• Trade friction embedded into costs— New US–EU and US–Japan frameworks cap escalation but elevate compliance and origin-tracing demands.
• Labour markets shifting from tight to thin— US and UK hiring momentum is weakening, while the euro area remains steady at low unemployment. Hours worked and revisions are early indicators.
• Narrow market leadership— Equity strength rests on a small group of firms. Breadth and liquidity stress are critical signals.
• FDI pipeline quality— Announced projects are concentrated in strategic sectors but slower to execute where policy is uncertain. Monitor greenfield-to-completion ratios.

Market Dynamics / Where sentiment, risk & hiring are showing up

The bottom line:

US equities reached record highs after the Fed cut. European markets are steady, while Chinese equities regained some ground but remain policy-sensitive. Market strength rests on a narrow set of companies, leaving indices vulnerable to shocks around policy announcements.

The bottom line:

US unemployment was 4.3 percent in August with slower payroll gains and downward revisions. Euro area unemployment was 6.2 percent in July. The UK’s jobless rate rose to 4.7 percent in May–July with vacancies falling. China’s official urban unemployment rate was 5.2 percent in August with youth joblessness elevated. Labour markets are shifting from tightness to fragility, signalling weaker demand and softer wage growth ahead.

The bottom line:

Productivity trends continue to show notable divergence. The US remains the global leader, with output per hour worked rising to 81.8 USD, driven by advances in automation and sustained investment in workforce skills. The Eurozone improved to 71.32 USD, reflecting modest gains but still constrained by structural inefficiencies and uneven progress among member states. In the UK, productivity grew slightly to 69.49 USD, underscoring persistent stagnation tied to limited investment and economic uncertainty.

Meanwhile, China’s increase to 19.77 USD highlights incremental progress fuelled by industrial upgrades, though structural challenges like an aging workforce and capital inefficiencies continue to weigh on long-term potential. These patterns underscore the uneven pace of global productivity growth, shaped by technological advancement and regional disparities.

Source: Ibec Global original chart based on the estimates from the International Labour Organisation (ILO).

CEO Sentiment & Strategic Priorities

The bottom line:

CEO confidence is subdued but steady. Investment priorities are shifting towards adapting to policy uncertainty and protecting supply chains. Confidence now hinges less on macro fundamentals and more on the direction of regulation and politics.

The Long View / Topical deep dives based on emerging global issues.

The Fractured Finance Order: Capital, Currency & the New Gatekeepers

Capital is no longer universally mobile. It flows through competing channels shaped by currency blocs, sovereign balance sheets, subsidy regimes, and digital systems. Dollar dominance remains, but diversification into euro, RMB, and gold is growing. Public debt above US$100 trillion is limiting fiscal flexibility, while subsidy regimes increasingly act as gates to access rather than neutral incentives. Digital finance is splitting into regional platforms, each with its own compliance requirements. The underlying change is structural. Finance is being engineered into controlled channels, similar to supply chains. Those who build modular, multi-channel access will be best placed to secure funding in a fragmented system.

For further in depth analysis on the fractured finance order, check out the latest edition of our Global Compass here.