The week ahead: abrdn’s Thomas Watts assesses this week’s economic data

by | Jun 19, 2023

It’s a busy week of economic news ahead, as Thomas Watts, Investment Analyst, abrdn, delves into the key economic data releases that investment managers will be focused on this week as he comments;

“The coming week could well be defined on domestic shores during Wednesday as the Office for National Statistics releases it UK inflation data. Ironically falling on the day of the summer solstice, it could be a very long day indeed for the Bank of England (BoE) if the recent trend of inflation coming in well above expectations continues. With the BoE virtually assured to raise rates further, many economists will be examining the data to not only see if the headline level of inflation is falling but also changes in the core measure, a reading which strips out the volatile fuel and food sectors.

“The following day will see the BoE most probably announce a 0.25% rate hike, as well as giving their views on the domestic economy and forward guidance as to what they may do next in terms of borrowing costs.

“It won’t be just Andrew Bailey and the BoE that come out this week, with their American counterparts also making an appearance. Jay Powell, Chair of the US Federal Reserve, is due to testify about the Semi-Annual Monetary Policy Report before the House Financial Services Committee, in Washington DC and could well give some future hints as to his views on the economy.

“The end of the week brings us a raft of PMI data from all over Europe, as well as in the UK and US. Covering both the Services and Manufacturing sectors, PMI readings prove so useful to economists due to the data acting as a leading indicator of economic health. Businesses usually react quickly to market conditions, with their purchasing managers holding perhaps the most current and relevant insight into the company’s view of the economy.”

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