All of the main macro action in the coming week takes place on Wednesday when UK GDP and US inflation numbers are both published.
Having enjoyed a decent honeymoon period since the election, things might start to get serious for Keir Starmer and Rachel Reeves from Wednesday with growth expected to slow.
July’s number might show a small pick up from the zero growth seen in June, but after that month expect to see downward revisions for the overall growth of the UK economy from the “gangbusters” first two quarters of 2024.
A revival in construction does offer some reason for optimism, but it only accounts for a small part of the economy overall.
Estimates for July are for growth of between 0-0.2%.
US inflation to drop again
In the US, it is inflation time again on Wednesday with concerns now switching away from rising prices to whether the us can even avoid a recession.
In July, the annual headline inflation rate dipped for a fourth straight month to 2.9% marking the lowest level since March 2021.
Core inflation is predicted by the consensus to hit a three-year low of 3.2%.
For August, headline inflation is forecast to ease to 2.6% and for core inflation to stay steady at 3.2%.
What the impact is on the thinking of the US Fed is the key, with current projects for a 35 bps (0.35%) rate cut for September as part of cuts of 110 bps (1.1%) by the end of 2024.