Introduction: UK GDP report for August today
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
August was a volatile month in the UK. It began with riots sweeping England, and interest rates being cut for the first time in over four years, and ended with the new Labour government warning that tough decisions would be needed to fix the nation’s finances.
And this morning, we’ll learn how the econony fared during August, in the final GDP report before the budget later this month.
UK GDP has flatlined in June and July, so Chancellor Rachel Reeves will be desperately hoping that we get a number with a plus sign at the front at 7am.
Encouragingly, economics are expecting a return to growth. The City of London is expecting that GDP rose by 0.2% in August.
A weak report could spur the Bank of England towards cutting interest rates, explains Tony Sycamore, market analyst at IG:
The market is looking for GDP to rise by 0.2% in August after flat readings in June and July. A softer-than-expected GDP reading would fuel expectations of a BoE 25bp rate cut at its next meeting on November 7th.
The agenda
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7am BST: UK GDP report for August
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7am BST: UK trade balance for August
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1.30pm BST: US producer prices index for September
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3pm BST: US University of Michigan’s consumer confidence survey
Key events
Former Darktrace CEO Poppy Gustafsson named as UK investment minister
Poppy Gustafsson, the former CEO of cybersecurity firm Darktrace, has been given a role to boost UK growth in the months ahead.
She was appointed as the UK’s new investment minister last night, just days ahead of the government’s business summit in London.
Gustafsson, who will be made a peer in the House of Lords, is an “accomplished entrepreneur who brings invaluable experience to the role,” Prime Minister Keir Starmer explained.
Gustafsson, 42, was available after stepping down from Darktrace last month following its takeover by private equity firm Thoma Bravo.
Green energy firms promise more than £24bn of new investment in Britain
The UK economy has already received a growth boost this morning – the leaders of the world’s biggest green energy companies have promised more than £24bn of new private investment across Great Britain.
The single largest investment set out ahead of next Monday’s investment meeting was by the owner of Scottish Power, Spain’s Iberdrola, which has promised to double its planned investments in the UK’s clean energy ambitions to reach £24bn over the next four years.
More here:
Deutsche Bank expect UK GDP to pick back up in August after two disappointing reads in June and July (when output flatlined).
Their chief economist, Sanjay Raja, told clients:
Our models point to a 0.2% m-o-m expansion to end the summer, driven by broad-based growth across the services, production and construction sectors. Risks are skewed to the upside, we think. We also think there’s a strong chance that the ONS revises up its initial GDP estimate for July from 0% to 0.1% m-o-m.
All up, downside risks to our growth projections are building – particularly following the weaker-than-expected July GDP print. Should the ONS stick to its initial GDP estimate for July, and August GDP prints in line with expectations, a downward revision to both Q3-24 GDP growth and 2024 GDP will likely be needed. We plan to revisit our projections following the GDP print. The good news is that underlying GDP remains healthy, and we continue to expect GDP growth to converge to trend next year.
Introduction: UK GDP report for August today
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
August was a volatile month in the UK. It began with riots sweeping England, and interest rates being cut for the first time in over four years, and ended with the new Labour government warning that tough decisions would be needed to fix the nation’s finances.
And this morning, we’ll learn how the econony fared during August, in the final GDP report before the budget later this month.
UK GDP has flatlined in June and July, so Chancellor Rachel Reeves will be desperately hoping that we get a number with a plus sign at the front at 7am.
Encouragingly, economics are expecting a return to growth. The City of London is expecting that GDP rose by 0.2% in August.
A weak report could spur the Bank of England towards cutting interest rates, explains Tony Sycamore, market analyst at IG:
The market is looking for GDP to rise by 0.2% in August after flat readings in June and July. A softer-than-expected GDP reading would fuel expectations of a BoE 25bp rate cut at its next meeting on November 7th.
The agenda
-
7am BST: UK GDP report for August
-
7am BST: UK trade balance for August
-
1.30pm BST: US producer prices index for September
-
3pm BST: US University of Michigan’s consumer confidence survey
