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Home » News » Economics » The Week Ahead » The UK, US and the Eurozone in the week ahead
  • UK Jobs data set to show wages still comfortably outstripping inflation
  • German wholesale prices tipped to highlight Eurozone inflationary pressures
  • US inflation on course to exceed 5%, heightening calls for faster action at the Fed


The week kicks off with the US Consumer Inflation Expectations survey for August. This is tipped to come in around the 5% mark, having printed 4.8% last month. There seems to be a real risk here that the general public is underestimating the cumulative impact of inflation, suggesting that the market may be more accommodating in the short term if this number comes in on the high side.

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Tuesday sees the usual raft of employment readings out from the UK. The August Claimant Count is tipped to show another marked reduction, something which may well be sustained despite government support for businesses now being in the final throes. July’s Unemployment Rate may tick slightly higher from the 4.7% posted in June, whilst July’s Average Earnings are expected to continue their inflation busting run, coming in around 7.5%. These numbers would continue to paint a broadly healthy picture for the economy and whilst there’s still the caveat about furlough support running until the end of this month, there’s still a meaningful buffer here – and no shortage of narrative about labour shortages.

US Inflation data for August will also be printed on Tuesday and this is expected to hold well above 5%. Even stripping out food and fuel, the core reading is still forecast to exceed 4%, which has the potential to see monetary policy hawks circling once again. Any narrative from Fed board members hinting at a need to move faster will provide fresh ammunition for the dollar – and potentially take a toll on stocks, too.


Germany Wholesale Prices for August are due on Wednesday. As we’ve said before these have to be absorbed either into higher prices or lower profits and with the annualised figure tipped to advance above 12% from the 11.3% posted in July, this could cause a degree of angst at the ECB. With the labour market not seeming to keep pace with the inflationary pressures, more intervention may still be necessary and this could rattle the Euro.

UK Inflation for August is also expected on Wednesday. After dipping lower in July, the headline rate is expected to jump towards 3% again, well ahead of target and there’s some concern that this will be sustained towards the year end. With fuel prices rising into the winter, this will hit heating bills although the sustained increase in wages will offer some slack here. It could fuel speculation that the Bank of England also needs to take more drastic action when it comes to policy tightening, something that could leave equities looking vulnerable.

Eurozone Wage Growth for Q2 rounds off Wednesday’s data and again this has the potential to be eye-catching. It’s set to comprehensively beat the 2.2% posted in Q1 but may struggle to match the 3.5% recorded in the last quarter of 2020. That’s going to be around the same level as the latest inflation figures showed, but it gives policymakers little scope for considering tax rises, in turn underlining why the ECB is happy to see inflationary pressures persist for while longer yet.


Thursday sees US Retail Sales for August being released. A second consecutive month of contraction is expected here, although with supply constraints rather than weakening consumer demand being the likely driver, markets may be quick to look past this number. That said, retail stocks may be pushed into the spotlight, especially if there’s a risk of the supply chain issues running into the peak Christmas shopping period.


Friday’s release of UK Retail Sales for August will also be under scrutiny. Having posted contraction in July after a spike in COVID cases and supply chain issues took their toll on the economy, the expectation is that the number will impress, with month-on-month gains of around 2% forecast. Anything much below this number given the UK should now be enjoying the benefits of high vaccination rates will have the potential to hit sentiment, whilst it also serves as a reminder of the economic cost of implementing new restrictions as we move towards winter.


This article is not investment advice. Investors should do their own research or consult a professional advisor.

Tony Cross

Tony Cross

Tony Cross is a market commentator with over 15 years of experience, producing compelling, insightful copy for journalists and investors alike. Focusing on macroeconomics, UK blue chip equities and inter market analysis, Cross's commentary is well regarded for its clarity and ability to cut through the waffle. He has been quoted in publications as diverse as The Financial Times, The Times, The Guardian and The Sun. He has also been a regular guest on both Share Radio and TipTV.

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