UK public sector net borrowing and the coming together of central bankers at Jackson Hole are set to dominate a quieter coming week of macroeconomic news.
Following inflation and retail sales figures from both sides of the Atlantic, as well as gross domestic product and unemployment data in the UK, next week will offer some insight into how central bankers view the global economic outlook.
Jackson Hole Symposium, Thursday - Saturday
This is as the Jackson Hole Symposium takes place in Wyoming from Thursday 22 August.
According to IG Group analysts, questions over the depth of the Federal Reserve’s September rate cut are set to be front and centre, with the reduction already priced in.
“Central bankers are finding themselves centre stage for reasons with which they may not feel entirely comfortable,” AJ Bell analysts added, given “policy divergence” after the Bank of Japan, Bank of England and Federal Reserve have raised, cut and held rates respectively recently.
“The US Federal Reserve is facing more questions about the risk of policy error and whether it is squeezing too tightly as markets fret about gathering signs of an economic slowdown in the USA,” AJ Bell added.
Attention will therefore turn to the conference, with Fed chair Jerome Powell’s speech on Friday in focus.
Public sector borrowing and other data in the UK
Further data in the UK will offer investors more clarity on what seems to be an improving economic landscape in the meantime, after a widely positive set of inflation, unemployment and GDP figures this week.
This will include public sector net borrowing on Wednesday, before purchasing managers index (PMI) and consumer confidence data on Thursday and Friday.
According to Trading Economics, public sector borrowing is forecast to have fallen by £2.6 billion in July, from June’s £13.6 billion deficit.
Both construction and service sector PMI on Thursday then come after improvements in July, while uncertainty following a change of government last month is set to hit consumer confidence.