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The OECD upgraded the UK's economic growth estimates
As the pound reported marginal losses against key currencies yesterday, the euro increased to a 14-month high against the US dollar as demand faltered. This morning, the euro has continued to strengthen as the focus shifts to key speeches from ECB president Christine Lagarde and Fed chair, Jerome Powell.
The Organisation for Economic Cooperation and Development (OECD) reported yesterday that it upgraded the UK’s growth forecast for this year to 1.1% from 0.4% in May, overtaking estimates for Japan, Italy and Germany. The outlook said that the global economy is “turning a corner” and went on to describe the UK’s economy as “robust”.
Yesterday morning, Megan Greene of the Bank of England emphasised the need to cut interest rates gradually. When asked about the current inflation outlook, Greene said that price pressure indicators are consistent and continue moving in the right direction.
This morning, Germany’s GfK consumer confidence indicator improved to -21.2 heading into October, beating market forecasts of -21.5. This was mainly driven by increases in both income expectations and propensity to buy.
In the UK, the Rail, Maritime and Transport (RMT) union announced that workers have voted overwhelmingly to accept pay offers from train companies and network rale following a long-running argument concerning pay rises.
This afternoon, figures are expected for US durable goods orders. Markets forecast orders to have fallen 2.2% in August, underperforming against a surge of 9.9% in July.
Federal Reserve chair, Jerome Powell is set to speak this afternoon at the 2024 U.S. Treasury Market Conference and, as always, investors will be keenly listening out for any signals on the direction of the next monetary policy meeting.
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GBP: Economic growth forecasts upgraded
The OECD ranked Britain joint second among the G7 developed countries in an upgraded forecast that saw the UK’s outlook increase from 0.4% in May, to 1.1% in September. The 2025 forecast of 1.2% was maintained.
GBP/USD: the past year
EUR: Lagarde to speak this afternoon
This afternoon, European Central Bank president Christine Lagarde and other policymakers are due to speak in Frankfurt at the eighth annual ESRB conference, New Frontiers in Macroprudential Policy.
GBP/EUR: the past year
USD: Investors await PCE on Friday
With little high-level UK data on the cards midweek, US dollar investors look to Friday’s price core inflation figures set to be released on Friday for fresh hints at the direction of the Federal Reserve.
EUR/USD: the past year
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