Eurozone: ECB Rate Hike Priced In, Focus on Post-Meeting Guidance and Inflation Data. UK: PMI Surveys in Focus as Disinflationary Pressures Loom
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Eurozone
A 25 basis point rate hike from the ECB is almost entirely priced in ahead of the meeting on Thursday but what comes after is up for much more debate. Recent commentary from policymakers suggests a pause may very much be on the cards in September, on the back of some progress in the inflation data recently. The ECB has taken a hawkish stance after meetings until now but next week could see President Lagarde and her colleagues tweak the communication and leave the door open to a pause at the following meeting.
The following day we’ll get some flash inflation data from member states including Germany, France and Spain while the week will start with flash PMIs from Germany, France and the eurozone.
Finally, Spain goes to the polls this weekend in a highly unusual late summer snap election in which a party from the far left or right will probably be kingmaker. It promises to be an eventful week.
UK
A very quiet week for the UK following one in which inflation was shown to be finally falling and interest rate expectations have been pared back. The focus this week will be on the PMI surveys and whether we can get any further signs of disinflationary pressures building and the economy cooling.
