UK poised to suffer the biggest Covid blow of any major economy - Telegraph
|The UK will suffer the heaviest Covid-19 impact of any major country this week as signs of faltering spending raise fears that the recovery is already running out of steam...
Economy shrinks by 23pc over the first half of 2020 due to drop in consumer spending during lockdown.
- The Telegraph reported.
Market implications
The week ahead holds two critical data points.
We will have the Labour market data as well as Gross Domestic Product.
As for GDP, the services sector (80% of the UK economy) remains the big unknown through June (we forecast 7% m/m for IoS), but after May's disappointment, some catch-up is inevitable, with IP and Construction helping support growth too (both at 10% m/m), analysts at TD Securities explained.
We still look for a dire 20Q2 growth number, however, roughly in line with the BoE's recent -21% QoQ estimate.
For the time being, the dollar is on the back foot, but that could all come undone vs the pound as the UK 's economic issues move back to the fore as prospects of negative rates swell.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.