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Activity data due at 7:00GMT

UK DATA
  • UK activity data, including the first print of quarterly GDP as well as monthly GDP and its components for December, is due for release at 7:00GMT.
  • In terms of quarterly GDP, the Bloomberg survey is largely split between analysts expecting a flat Q/Q print or -0.1%Q/Q. The latter would see the UK having entered a technical recession with two quarters of negative growth (assuming no revisions to Q3 data). Whether this is the case or not will be the main coverage point for the mainstream media but the Bank of England has been trying to communicate that in monpol and forecasting terms, growth has been broadly flat for the best part of a year (so it doesn't matter if growth is -0.1%Q/Q or +0.1%Q/Q in the big picture). Probably more important will be the breakdown of the quarterly print - how much of the growth is driven by private consumption and capital investment.
  • Looking at the monthly print, the Bloomberg median looks for -0.2%M/M for December with estimates ranging from -0.3%M/M to +0.1%M/M. In terms of the main subcomponents (services, IP and construction) - all are expected to see M/M falls following positive (ex construction) prints in November.
  • In terms of the market reaction we expect a much more muted reaction than to either the inflation or labour market prints this week, with today's data unlikely to convince any MPC member whether to change their vote in upcoming meetings. As of yesterday's close markets priced 6bp of cuts for May, 15bp by June, 30bp by August (fully pricing a 25bp cut) and 75bp by year-end.
  • We have some brief sellside views summarised on page 10 of our MNI UK Data Preview document, available here.
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