Categories: Economic News

Morning Bid: Memo to Britain’s next PM: There’s no stopping bad news

A woman shops for groceries as restrictions in the city have begun to ease, amid the outbreak of the coronavirus disease (COVID-19), at a market in Leicester, Britain, August 19, 2020 .REUTERS/Paul Childs

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A look ahead to the European and global markets of Anshuman Daga

Another day, another miserable set of British data.

“A sense of exasperation” and “crisis of confidence”. That was the grim message from the UK’s longest-running survey of family finances released on Friday. Read more

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The record low of -44 in the Gfk consumer sentiment index in August, worse than economists expected, underscores a summer of discontent that shows no signs of abating.

Not surprisingly, the favorite to be the next British Prime Minister Liz Truss says that the defining mission of her government would be to reactivate the economy. Read more

But with Britain having the dubious distinction of becoming the first major rich economy to see double-digit price growth, the Bank of England will raise interest rates by another half point to 2.25%.

Retail sales data due on Friday will set the mood for the markets. Growing concerns over a weaker British economy kept sterling lower as it fell to a one-month low.

Eurozone inflation hit a new record high of 8.9% year-on-year in July, opening a nasty feedback loop as the current account deficit weighs on the euro and import bills commodities, from gas to metals, are increasing.

Asian shares were left in limbo on Friday as the US dollar rose to a fresh one-month high against a basket of major peers as Federal Reserve policymakers continued to talk of the need for new increases in interest rates.

Turkey’s central bank, on the other hand, shocked markets with a 100 basis point rate cut despite rising inflation. Read more

Meanwhile, on the football field, it appears it will take deep pockets to persuade the Glazer family to part ways with Manchester United, although fans hope a successful sale could pave the way for a return to winning ways for the club.

Key developments that could influence markets on Friday:

Economic data: July UK ONS retail sales data, eurozone current account balance

US labor market resilient despite rate hikes; Withering housing market: read more

German economic outlook bleak, says finance ministry: read more

Japan inflation remains above BOJ target, price pressures widen: Read more

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Reporting by Anshuman Daga; Editing by Jacqueline Wong

Our standards: the Thomson Reuters Trust Principles.

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