Markets heard a sobering speech from the UK’s chief economist Huw Pill yesterday. He warned that the Bank of England will be forced to increase interest rates even as the economy enters recession. Pill told Swiss bank, UBS “That’s a difficult trade-off environment for monetary policy.”
Investors are eagerly anticipating the release of Britain’s latest GDP data this Friday. Markets have predicted Britain’s economy will shrink, with the latest gross domestic product for Q3 (quarter on quarter) expected to contract by 0.4%. Likewise, the annual reading is expected to fall to 2.3% from 4.4% this time last year.
The month-over-month reading is also forecast to contract by 0.5% from 0.3% in August.
A key data release to watch next week, will be Germany’s economic sentiment index for November. In the previous data, the indicator rose slightly by 2.7 points to -59.2. This was above market expectations of -65.7 and up from the 14-year low it hit in September.
In the US, the Michigan consumer sentiment data will be released on Friday. The index will give economists an informative insight into how American consumers view prospects for their own financial situation, as well as the economy over the near term and short term.
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