24  All speeches are available online at www.bankofengland.co.uk/speeches  24  Chart 27: Global activity indicators Index, 50 = no change  Percentage change, 3 months on 3 months ago Global manufacturing new orders PMI (lhs)  56  5 Global services PMI (lhs)  54  4 3 2  52  1 0  50 CPB world IP  -1 48  CPB world trade in goods  Global manufacturing PMI (lhs)  -2 -3  46  -4 44 2017  -5 2018  2019  Sources: IHS Markit, CPB and Bank of England calculations. It is notable that movements in global asset prices and companies’ expectations appear to have been large relative to the modest announced tariff increases. Based on the higher trade tariffs announced so far, and using standard trade models, we would expect a negative impact on global growth of a few tens of basis points.25 The adjustments in asset prices and business survey responses have been multiples of that. One way of beginning to make sense of this puzzle comes from casting our minds back a decade. Back then, we also saw outsized responses in global asset and output markets following a modestly-sized shock – a collapse in the US sub-prime market which at the time accounted for less than 1% of global wealth. This market’s collapse prompted the sharpest fall in global output and asset prices since the 1930s.

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