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GLOBAL WEEK AHEAD: UK & US Inflation in Focus

MNI (London)

The week ahead sees another busy week for central banks as they attempt to tackle relentless global inflationary pressures. Following the passing of Queen Elizabeth II, the BOE has rescheduled the MPC meeting to September 22 and UK markets will likely close on the day of the funeral (expected to be September 19).


UK Monthly GDP/Services/IP/Construction/Trade: Monthly GDP growth is anticipated to be modestly re-entering positive growth at +0.3% m/m in July following the June -0.6% m/m slide. Industrial production will likely be flat, following the sharp -0.9% m/m fall prior, with manufacturing to follow suit.

Services will again be closely watched, as the GfK survey recorded a fresh historic low in consumer confidence as the cost-of-living eats into outlooks and sees demand slow. Consensus is looking for a recovery to +0.4% m/m. The UK trade deficit is also set to widen, by a further £400 million to around the £-11.8B level.

NY Fed Survey of Consumer Expectations: The August report of consumer expectations will be watched for inflation expectations, following July’s substantial reductions in short to long-term inflation expectations. This is ahead of the U Michigan index on Friday. Labour market expectations should remain robust.


Germany CPI (final) and ZEW Survey: Final readings are likely to confirm HICP at +0.4% m/m and +8.8% y/y for the German economy, as headline and core inflation saw no sign of slowing in August. Final prints are due across the euro area this week, all seen confirming estimates and a record +9.1% y/y for the aggregate. This data includes the relief of the 9-euro ticket and fuel subsidies. As such underlying inflation is likely to have been higher.

The ZEW survey of German economic conditions will likely see a further deterioration in both current conditions and expectations in September, as worsening inflation, waning consumer demand and contracting industrial production see economic outlooks darken further.

UK Labour Report: Another strong labour report is due for August. A 0.2pp acceleration in average weekly earnings 3m/yoy to +5.3% y/y in July is anticipated, alongside a steady unemployment rate of 3.8%, 0.2pp below pre-pandemic levels.

US CPI: All eyes will be on US inflation this week, with forecasts looking for a 0.4pp cooling to +8.1% y/y and month-on-month deflation at -0.1%. This would be the second month of slowing headline CPI, however as Mester stated last week in MNI’s webcast, multiple consecutive rates of slowing prices will be necessary for the Fed to take their foot off the accelerator.

A 0.2pp acceleration to +6.1% y/y in core CPI is likely, which would ensure a third 75bp hike is firmly on the table ahead of the Sept 21 decision.


UK CPI: No relief is on the cards for UK CPI, seen ticking up 0.1pp to +10.2% y/y in August, with a +0.6% m/m increase. Only core inflation is anticipated to slow by 0.1pp to +6.1% y/y, although whether this cooling materialises remains to be seen. A 50bp hike is all-but necessary.

Eurozone Industrial Production: In line with disappointing contractions in Germany, France and Spain, Eurozone IP should contract in July compared to June. -0.8% m/m is pencilled in as high energy and input prices alongside (albeit easing) supply chain issues are worsened by waning demand.

US PPI: Expected to flatline after a -0.5% m/m deflation in July, the August factory-gate inflation should reflect further falling commodity prices, whilst core PPI continues to see a modest +0.3% m/m uptick.


US Retail Sales: Excluding auto and gas, another optimistic +0.9% m/m upswing in retail sales is expected in August as summer spending remains in positive growth territory. Industrial production looks less rosy, seen only growing by 0.2% m/m in August as new orders slow going into year-end due to continued economic uncertainty. Des


UK Retail Sales: The shift of the BOE meeting to next week implies that UK retail sales data for August will enter the calculus for the interest rate decision. Excluding fuel, the anticipated -0.5% m/m and -3.4% y/y contractions will make for uncomfortable reading, as a minimum of 50bp hike next week sets to choke growth further and get a handle on inflation exceeding 10% y/y.

US U. Michigan Sentiment: An uptick to 59.3 is expected in the September flash, in the third month of improving consumer confidence. Inflation expectations will likely be revised lower again, and the key focus will be on the magnitude of these downwards revisions.

12/09/20220600/0700**UK Trade Balance
12/09/20220600/0700***UK Index of Production
12/09/20220600/0700**UK Index of Services
12/09/20220600/0700**UK Output in the Construction Industry
12/09/20220600/0700**UK UK Monthly GDP
12/09/20220730/0930EU ECB de Guindos Speaks at Foro Economico
12/09/20220800/1000*IT Industrial Production
12/09/20221200/1400EU ECB Schnabel Opens ECB Research Conference
12/09/20221230/0830*CA Household debt-to-disposable income
12/09/20221500/1100**US NY Fed survey of consumer expectations
12/09/20221530/1130*US US Treasury Auction Result for 26 Week Bill
12/09/20221530/1130***US US Note 03 Year Treasury Auction Result
12/09/20221600/1200***US USDA Crop Estimates - WASDE
12/09/20221700/1300**US US Note 10 Year Treasury Auction Result
12/09/20221700/1300*US US Treasury Auction Result for 13 Week Bill
13/09/20220600/0700***UK Labour Market Survey
13/09/20220600/0800***DE HICP (f)
13/09/20220700/0900***ES HICP (f)
13/09/20220900/1100***DE ZEW Current Expectations Index
13/09/20220900/1100***DE ZEW Current Conditions Index
13/09/20221000/0600**US NFIB Small Business Optimism Index
13/09/20221230/0830***US CPI
13/09/20221255/0855**US Redbook Retail Sales Index
13/09/20221400/1000**US IBD/TIPP Optimism Index
13/09/20221700/1300***US US Treasury Auction Result for 30 Year Bond
13/09/20221800/1400**US Treasury Budget
14/09/20220600/0700***UK Consumer inflation report
14/09/20220600/0700***UK Producer Prices
14/09/20220600/0800***SE Inflation report
14/09/20220830/0930*UK ONS House Price Index
14/09/20220900/1100**EU industrial production
14/09/20221100/0700**US MBA Weekly Applications Index
14/09/20221100/1300EUECB Chief Economist Lane MMCG Opening Remarks
14/09/20221230/0830***US PPI
14/09/20221430/1030**US DOE weekly crude oil stocks
15/09/20220130/1130***AU Labor force survey
15/09/20220645/0845***FR HICP (f)
15/09/20220900/1100*EU Trade Balance
15/09/20220915/1115EU ECB de Guindos Keynote Speech
15/09/20221230/0830**US Jobless Claims
15/09/20221230/0830***US Retail Sales
15/09/20221230/0830**US Import/Export Price Index
15/09/20221230/0830**US Empire State Manufacturing Survey
15/09/20221230/0830**US Philadelphia Fed Manufacturing Index
15/09/20221230/0830**US WASDE Weekly Import/Export
15/09/20221300/0900*CA Home Sales – CREA (Canadian real estate association)
15/09/20221315/0915***US Industrial Production
15/09/20221400/1000*US Business Inventories
15/09/20221430/1030**US Natural Gas Stocks
16/09/20220200/1000***CN Fixed-Asset Investment
16/09/20220200/1000***CN Retail Sales
16/09/20220200/1000***CN Industrial Output
16/09/20220200/1000**CN Surveyed Unemployment Rate
16/09/20220600/0700***UK Retail Sales
16/09/20220900/1100***EU HICP (f)
16/09/20220900/1100**IT Italy Final HICP
16/09/20221215/0815**CA CMHC Housing Starts
16/09/20221400/1000***US University of Michigan Sentiment Index (p)
16/09/20222000/1600**US TICS
17/09/20221645/1845EU ECB Chief Economist Lane Cantillon Lecture

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