Good morning and welcome to our rolling coverage of business, markets and economics in the UK and the Eurozone.
And welcome to GDP day in the UK.
After a whipsaw start to the week on global markets thanks to US President Donald Trump’s attack on alleged “currency manipulation” by China, things settled down into a more normal August pattern of fairly muted moves later in the week.
Today, however, all eyes will be on the 9:30am BST health check for the British economy in the second quarter. The economists’ consensus expectations for the GDP growth rate point to… nothing. If the forecasts are to be believed growth will come in at 0%, meaning output was the same in the second quarter as in the first.
That would represent the worst economic performance since the final quarter of 2012, when GDP shrank by 0.2%. It comes after an unexpected bounceback in the first three months of 2019, when the expansion hit 0.5%.
Whatever the reading, it will be seized upon in the political realm immediately, amid an already febrile environment as Boris Johnson aims his fledgling government for a no-deal Brexit.
That threat is thought to be the major factor behind British economic weakness in recent months, as uncertainty prevents businesses from making major spending decisions.
That is thought to be particularly the case in the manufacturing sector. Economists on average believe the sector shrank by 1.1% in the year to July, with out-of-season shutdowns in the car sector a big factor.
Yesterday Jeremy Corbyn wrote to the UK’s most senior civil servant to intervene to stop Boris Johnson forcing a no-deal Brexit in the middle of an election campaign, amid rising signs the country is heading for the polls again this autumn.
This all comes amid a difficult time for our biggest trading partners as well. Alongside the aforementioned trade war between the US and China, the Eurozone economy is struggling as the German industrial powerhouse stutters.
German trade figures this morning just added to weak picture from the eurozone’s largest economy. German exports dropped by 0.1% month-on-month in June, from 1.3% growth during May. On the year, exports were down by a painful 8%.
- 9:30am BST: UK GDP growth rate (second quarter)
- 9:30am BST: UK industrial production (June)
- 9:30am BST: UK manufacturing production (June)
- 9:30am BST: UK construction output (June)
- 9:30am BST: UK business investment (second quarter)
- 10am BST: Italy inflation rate final estimate (July)
- 1:30pm BST: Canada unemployment rate (July)
- 2pm BST: Russia GDP growth rate (second quarter)
- 2pm BST: UK National Institute of Economic and Social Research monthly GDP tracker (July)