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The UK, US and the Eurozone in the week ahead

  • UK Consumer Borrowing set to decline further, raising questions over pace of recovery
  • Eurozone PPI data could raise concerns over inflation threat in months ahead
  • US Wage Growth tipped to run significantly below price inflation


Tuesday morning sees the publication of May’s UK Consumer Borrowing data from the Bank of England. Despite the reopening of non-essential retail back in mid-April, expectations are for this number to print in negative territory – and quite likely below the figure seen last month at around -£700m. There’s some belief that pent up demand for hospitality is drawing consumers away from those big ticket retail items and many saved significant amounts of cash during the pandemic, but the repeated net reductions in borrowing here may soon start to cause concern over the scope for prudent consumers to reinvigorate the economy.


Wednesday morning sees the release of Eurozone Flash Inflation readings for June. Expectations are that despite rising input costs, this figure will hold steady at around the 2% level seen in May, although policymakers at the ECB would seemingly be happier to see this reading run a bit hotter for a little longer. They’re adamant that any spike will be transitory, but to have it plateau so quickly and at this level may look like a missed opportunity.

On Wednesday afternoon, the ADP Employment Change reading from the US for June will be published. Acting as we always say as the curtain-raiser ahead of Friday’s non-farm payrolls, the number will be under scrutiny. There’s a fairly sharp reversion expected as after having tacked on almost 1 million jobs in May, a reading of just under 500,000 is seen as likely. In isolation this is unlikely to be much cause of concern given the phenomenal pace of acceleration the US economy has seen, but the prospect of marked variations here in the months ahead could start to prove distracting.


Thursday morning sees the publication of Eurozone Unemployment Data for May, and again there’s a risk that recent advances here could now start to evaporate. Having printed 8% in April, expectations are for a reading that will be little changed, something that is again likely to cause concern at the currency bloc faces up to the pressure of mounting price pressures.


On Friday morning, Eurozone PPI data for May is set for release. This relates to the input prices paid by manufacturers, so typically filters down to either price inflation and/or reduced profitability. Expectations are that this number could come in at almost 10% on an annualised basis, something that will likely offer fresh cause for concern, especially if a lacklustre labour market continues to permit sluggish wage growth.

Rounding out the week we have the US Non-Farm Payrolls, along with what will arguably be even more insightful datapoints on wage growth. June’s Average Hourly Earnings on an annualised basis are set to come in unchanged or fractionally higher than the 2% seen a month ago, which is a long way short of that recent 5% print for inflation. The US economy may have rebounded well as the global health pandemic wanes, but there are still imbalances in play.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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