There’s no danger of a quiet few days ahead of the Christmas break as UK inflation figures, US gross domestic product figures and interest rate calls on each side of the Atlantic all get released next week.
Following news the UK economy contracted for a second successive month in October, focus will be on Wednesday’s inflation figures and Thursday’s Bank of England rate call.
Expectations are for inflation to have accelerated to 2.5% in the year to November, following a 2.3% rise in October, according to Trading Economics.
Markets have held their nerve prior to Thursday’s UK rate decision, with chances of a cut remaining slim despite further economic decline, XTB analyst Kathleen Brooks noted.
The Bank of England’s outlook will be key though, she said, with the probability of a “mega cut” come February set to grow if improvement is not seen into the new year.
Across the Atlantic, the Federal Reserve’s latest decision on interest rates will come on Wednesday, with bets pointing to a 25 basis point cut.
In-line consumer price index data in the week just gone had firmed up expectations for a cut, before uncertainty hits with incoming president Donald Trump’s potentially inflationary policies.
A final estimate for third-quarter US gross domestic product is then due on Thursday, which is expected to see growth of 2.8% confirmed.
Elsewhere over the week, retail sales figures from both the US and UK will feature, alongside personal consumption expenditures data from the former.