The debate over the global outlook is actually very simple. The key question is whether the current US slowdown has broader cross-border consequences. For financial markets, which are still discounting relatively sanguine world growth prospects for 2007-08, there is great enthusiasm for a global decoupling - that rosy scenario whereby the rest of the world miraculously untethers itself from the US. My advice is to keep the champagne on ice.
On the surface, the latest global trends seem consistent with a decoupling scenario. While most of the world has picked up, US gross domestic product growth has slowed to 2.1 per cent over the four quarters to the end of March this year.
