The global economy faces continued difficulties in 2012. However, with the global economic slowdown, oil prices are unlikely to rise, therefore there may be a relief from rising cost-push inflation factors.
UK in 2012

- Government spending cuts
- Rise in unemployment to over 2.6 million
- Fall in living standards from rising cost of living and weak wage inflation
- Continued credit crunch and reluctance of banks to lend
Goods news for the UK in 2012, will be the fall in inflation, which gives scope for possible more monetary easing.
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UK bonds have also escaped the pressure felt by Eurozone economies.
However, the disappointing growth will lead to lower than expected tax revenues and therefore higher government borrowing.
China in 2012
China has enjoyed two decades of constant and rapid economic growth, however in recent months there have been increasing signs of overheating. China faces problems of- Unregulated bank lending
- Boom and bust in housing market
- Growing inflation.
Eurozone in 2012
The Eurozone is likely to face a recession in 2012. Throughout the Eurozone there has been spending cuts and drive to austerity. HOwever, there has been no offsetting monetary easing or depreciation in the exchange rate. In Q3 2011, Ireland faced one of its biggest drops in GDP
Rising Bond yields in EU cause fear for future of EU economy - increasing need for spending cuts, but no policies to increase growth.


