After the US midterms, what will a lame duck Trump mean for the global economy?

Republicans’ crushing setback will play out in stock markets, inflation, interest rates and economic growth

Donald Trump’s loss of control of the House of Representatives and the Senate has put the world economy on notice for an unpredictable final two years of his presidential term.

After Democrats swept aside his Republican party in the midterm elections, analysts said the prospect of a highly erratic lame-duck president would have significant implications for financial markets, growth, inflation, government borrowing costs and living standards.

Here are the biggest expected consequences for the US economy and for other countries.

Stock markets

Markets initially dropped in early trading in Asia overnight but rallied as investors weighed up the midterm results.