Sterling finished last week strong, gaining around a cent against the US dollar and the euro across Thursday and Friday. Much of this momentum stemmed from a notably divided interest rate decision from the Bank of England, which highlighted “genuine uncertainty” around the path of inflation, to borrow Governor Andrew Bailey’s phrasing.
Policymakers were in the spotlight last time out, but this week it’s all about the data. The Office for National Statistics (ONS) will report the UK’s unemployment and average earnings figures for June on Tuesday, before Thursday brings what feels a crucial GDP report for the second quarter of 2025.
Economists expect the UK economy grew by just 0.3% in the three months to June. Chancellor Rachel Reeves will no doubt be crossing all of her digits for a larger increase, although it would take something spectacular to quiet talk of tax increases in the autumn.
Germany’s consumer confidence is expected to have taken a big hit this month. What with the recent trade drama, which culminated in the lukewarm reception to the eurozone’s trade deal with the United States, consumers may well be sticking money in the bank rather than circulating it through the economy.
There are also plenty of data points to discuss over in the United States. After last month’s jobs disaster, markets will be scouring the inflation report and the University of Michigan’s consumer sentiment report for signs of further stress.
Things are also moving fast in the geopolitical arena. There are reports that US President Donald Trump might meet Vladimir Putin in Alaska to discuss a “pause” to the war in Ukraine, but optimism is tempered by some significant stumbling blocks; Volodymyr Zelenskyy is reported to be conspicuously absent from the invite list.
Over the weekend, we learned headline inflation in China was unchanged month-on-month in July. Despite the destabilising impact of tariffs, inflation has either decreased or been unchanged in five of the six latest monthly reports.
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