UK: Economics event for next week - Danske Bank

Analysts from Danske Bank take a look into next week’s events in the United Kingdom, they include Bank of England meeting, CPI data and the labor market report. 

Key Quotes: 

“In the UK, the main event next week is the Bank of England (BoE) meeting on Thursday where we expect BoE to keep the Bank Rate unchanged at 0.25% with an unchanged vote count of 7-2. It is one of the small meetings without an updated Inflation Report and a press conference so we have to look for any changes to the policy stance in the minutes. It is not our expectation that the BoE will change its tone significantly, as the economy has developed more or less in line with the expectations set out in the latest Inflation Report of 3 August, but the BoE may address the weaker GBP. We still expect the bank to remain on hold throughout the Brexit negotiations, which is also what markets have priced in.”

“In terms of economic data releases, we get CPI data for August on Tuesday. We estimate CPI rose 0.5% m/m (rounded up), which should be enough to push CPI inflation up from 2.6% to 2.8% y/y.”

“On Wednesday the labour market report for July is due. We expect the annual growth rate in average weekly earnings excluding bonuses (3 month average) was unchanged at 2.1% y/y but see a risk of a further decline in the unemployment rate (3 month average) to 4.3% from 4.4%, as the single-month prints in June and July were quite low (4.4% and 4.2%, respectively). That said, the single month print is very volatile”.