Introduction: It's UK GDP Day
Good morning We'll find out shortly how the British economy performed in October.
At 7am the Office for National Statistics will release its first estimate for UK GDP in October.
And the city's economists fear it will be an underwhelming report, with growth expected to stagnate over the month.
This would follow zero growth in the third quarter of 2032 as the UK economy stagnated under the impact of high interest rates.
Michael Hewson, Chief Market Analyst at CMC Markets UK, says:
With the UK barely avoiding a contraction in the third quarter, some recent economic data showed a slight improvement at the start of the fourth quarter, raising the prospect that the UK economy could avoid recession at the end of this year.
Considering that a year ago both the IMF and the Bank of England were predicting a long recession, this is no small feat.
Today's GDP report comes a day before the Bank of England announces its final planned interest rate decision for 2023; Interest rates are expected to remain at 5.25% at midday tomorrow.
Later today, the Federal Reserve will set interest rates – and is expected to keep interest rates at current levels. But investors around the world will be waiting for clues as to when and how quickly the Federal Reserve might begin cutting interest rates.
The agenda
-
7am GMT: UK GDP report for October
-
7am GMT: UK trade balance for October
-
10am GMT: Eurozone industrial production index for October
-
1.30pm GMT: US PPI producer price inflation index for November
-
7pm GMT: The US Federal Reserve sets US interest rates
Key events
Sanjay RajaBritish economist for German Bankexpects this morning's GDP report (due at 7am) to show flat output in October, following a surprise 0.2% rise in September.
Raja says:
How will GDP collapse in October? We expect both the services sector and industrial production to remain unchanged (0% mom). However, we assume that construction production will shrink – albeit slightly. The risks to our forecast are slightly to the downside.
And looking further forward, Raja predicts that the economy will grow slightly in the last quarter of this year:
We expect GDP to rise 0.1% qoq in 4Q23. The bad news? Recession clouds remain as around half of the Bank of England's rate hikes have not yet had an impact on the real economy. However, there is some good news. The recession clouds are gradually clearing and the latest survey data is significantly less pessimistic.
We continue to expect the UK economy to avoid recession next year and instead grow by 0.3% in 2024. But the sluggish growth will continue. We expect the economy to grow just 0.1% in the first half of 2024 before picking up speed in the second half of 2024 and beyond.
Introduction: It's UK GDP Day
Good morning We'll find out shortly how the British economy performed in October.
At 7am the Office for National Statistics will release its first estimate for UK GDP in October.
And the city's economists fear it will be an underwhelming report, with growth expected to stagnate over the month.
This would follow zero growth in the third quarter of 2032 as the UK economy stagnated under the impact of high interest rates.
Michael Hewson, Chief Market Analyst at CMC Markets UK, says:
With the UK barely avoiding a contraction in the third quarter, some recent economic data showed a slight improvement at the start of the fourth quarter, raising the prospect that the UK economy could avoid recession at the end of this year.
Considering that a year ago both the IMF and the Bank of England were predicting a long recession, this is no small feat.
Today's GDP report comes a day before the Bank of England announces its final planned interest rate decision for 2023; Interest rates are expected to remain at 5.25% at midday tomorrow.
Later today, the Federal Reserve will set interest rates – and is expected to keep interest rates at current levels. But investors around the world will be waiting for clues as to when and how quickly the Federal Reserve might begin cutting interest rates.
The agenda
-
7am GMT: UK GDP report for October
-
7am GMT: UK trade balance for October
-
10am GMT: Eurozone industrial production index for October
-
1.30pm GMT: US PPI producer price inflation index for November
-
7pm GMT: The US Federal Reserve sets US interest rates
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