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A week of fluctuations in the UK

Published 27/05/2024, 09:54
© Reuters.
- - Last week, the UK's economic landscape saw significant events that captured the attention of analysts and citizens alike. On Wednesday, 22nd May, the inflation numbers were released, with the Consumer Price Index (CPI) showing a 2.3% year-on-year increase. Meanwhile, the CBI Industrial Trends survey surprised with a 33-point decline.

The PMI numbers were mixed: Manufacturing PMI came in better than expected, while Composite and Services PMI data were lower than anticipated. Adding to the stresses on the UK economy, retail sales data released on Friday, 24th May, failed to meet expectations both yearly and monthly.

In political news, Prime Minister Rishi Sunak has called for general elections to be held on 4th July.

The stock market reacted to these developments with notable volatility. The FTSE 100 experienced a downward trajectory last week, starting the week at a high of 8,442.38 and closing on Friday at 8,317.59. Investors are closely monitoring upcoming corporate earnings reports and further economic indicators.

Sterling remained mostly stable throughout the week at 1.27 against the dollar, while the EUR/GBP pair cruised at around 0.85.

As the UK navigates these economic fluctuations, experts emphasize the importance of maintaining a balanced approach to monetary policy and fiscal support. The next few weeks will be crucial in determining the long-term impact of these recent events on the country's economic stability.

This week, the UK economic calendar is relatively quiet, with the most important events being the shop price index on 28th May, a speech by BoE Governor Bailey on 30th May, and house prices from Nationwide on 31st May.

In contrast, the Eurozone economic events present a more dynamic environment this week. Today, the German Ifo Business Climate Index came in at 89.3, below the expectations of 90.4. Additionally, the Eurogroup meetings are underway.

On Wednesday, 29th May, investors will be awaiting the German CPI numbers and the US Beige Book later the same day. On Thursday, Spanish CPI and Swiss GDP numbers will be released, followed by the Eurozone unemployment numbers and US growth and employment data.

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