{"id":3326,"date":"2023-09-13T09:03:13","date_gmt":"2023-09-13T08:03:13","guid":{"rendered":"https:\/\/hcfx.sofyma.com\/?p=3326"},"modified":"2023-09-13T09:11:59","modified_gmt":"2023-09-13T08:11:59","slug":"uk-economic-output-slumps","status":"publish","type":"post","link":"https:\/\/hamiltoncourtfx.com\/es\/uk-economic-output-slumps\/","title":{"rendered":"UK Economic Output Slumps"},"content":{"rendered":"
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This morning, the ONS showed that the UK economic output contracted 0.5% between June and July as strikes and wet whether caused major headwinds across the country. This marked a greater-than-expected contraction, given that the general market consensus had forecast a drop of 0.2%.<\/p>\n

Today\u2019s print indicates that the services sector fell half a percentage point as health activities plunged 3.4% with the ONS citing the cancellation of appointments and procedures. For example, the ONS said that \u201cNHS England reported that 65,557 appointments and procedures were cancelled because of the senior doctors strike and 101,977 acute inpatient and outpatient appointments were cancelled because of the industrial action by junior doctors\u201d. As we looked at yesterday, the ONS also indicated that there were some 281,000 working days lost sue to industrial action in July 2023 with most of the strike action being in the Education and Health and social work sectors. Next, the ONS citied a fall of 2.1% in the information and communication sector as a major drag behind the print. Indeed, notwithstanding how the poor weather over July kept Brits at bay for much of the month, computer programming services also slumped 3.4%.<\/p>\n

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Elsewhere, the country\u2019s retail trade also fell 1.2% while production and manufacturing fell 0.7% and 0.8%, respectively. This comes as households and businesses adjust to monetary conditions being at their tightest levels since 2008, with expectations of further hikes to come.<\/p>\n

Today\u2019s print also marks a considerable downturn from the previous month-on-month print of 0.5%, which was helped by an upbeat film and TV industry, along with the popularity of live events especially given the sunny weather seen over June. Some good news though included that the sports activities and recreation activities industry rose 12.4%.<\/p>\n

Last month, the Bank of England\u2019s monetary policy report noted that while they are no longer forecasting a recession, output will continue to remain sluggish over the next two years. Such projections views are of course a considerable improvement from their assessments last year which pointed to eight consecutive quarters of economic contraction (starting in Q4 2022). As such, the UK economy \u2013 like many of its European and North American counterparts \u2013 is expected to see a \u2018softer-than-expected\u2019 landing. Focus now turns to the UK inflation print on 20 September ahead of the BoE\u2019s interest rate decision on 21\u00a0<\/i>September where money markets are implying that there is around a 78% chance of a 25bps hike priced in.<\/p>\n

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The Impact of Weather?<\/h2>\n <\/div>\n
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Another GDP print has seen the ONS indicate a strong correlation with economic output and weather. Indeed, the ONS also citied the impact of July\u2019s poor weather behind UK retail sales slipping 1.2% between June and July while slumping 3.2% on an annualised basis. According to the Met Office’s monthly climate summary, the UK had 170.0% of the average rainfall for the month. This made it provisionally the wettest July since 2009 and the sixth wettest July on record since 1836. Regarding today\u2019s print, the ONS stated that the \u201cwet weather was cited as a reason for lower output in retail, as described in our Retail sales bulletin, and also in construction and outdoor accommodation venues\u201d.<\/span><\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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All Eyes on US Inflation<\/h2>\n <\/div>\n
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Today will see the release of US CPI, which is expected to increase marginally from last month\u2019s print of 3.2% (annualised headline) to 3.6%. Ahead of today\u2019s release, markets are considering the impact of higher oil prices and indications of supplies being tighter. On a month-on-month basis, US CPI is also expected to increase 0.6 percentage points, which if released would mark the greatest uptick in monthly inflation since June 2022. Annualised core inflation is however expected to slip from 4.7% to 4.3% on an annualised basis, as shelter and service inflationary pressures are expected to ease. If the 4.3% figure comes into fruition, this would mark the lowest level since September 2021.<\/p>\n

Today\u2019s inflation print comes ahead of the Fed\u2019s next interest rate decision on 20\u00a0September, though money markets are implying that there is a 7% chance of a 25bps hike priced in. As such, focus now turns to US CPI released at 1330 this afternoon.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

UK economic output contracts, weather impacting markets, and release of US inflation figures.<\/p>","protected":false},"author":15,"featured_media":2297,"comment_status":"open","ping_status":"open","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"rp-language":[16],"class_list":["post-3326","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-morning-updates","rp-language-en_gb"],"_links":{"self":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/3326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/comments?post=3326"}],"version-history":[{"count":19,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/3326\/revisions"}],"predecessor-version":[{"id":3345,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/3326\/revisions\/3345"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media\/2297"}],"wp:attachment":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media?parent=3326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/categories?post=3326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/tags?post=3326"},{"taxonomy":"rp-language","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/rp-language?post=3326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}