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UK Weekly Commentary - 13 July 2020

UK weekly commentary from Awa Brokers covering highlights, what we’re thinking about the markets and what your clients may be asking this week.


What we think

The number of people in the UK receiving unemployment benefits rose to 856.9K in April from 12.1K in March, indicating a weakness in the labour market. The unemployment rate also increased by 3.9% in April. Though consumer confidence measures indicate pessimism, the value of retail sales increased by 12.0%, a reversal of fall in prices observed three months to May.

Week ahead

BRC Retail Sales Monitor (YoY) (Jun) – Retails sales rose by 10.9% YoY, above a previous reading of 7.9%.

Construction Output (MoM) (May) – UK construction output of 8.2%, came in below forecast of 14.5%.

U.K. Construction Output (YoY) (May) – Construction output fell by 39.7% YoY, below expectation of -36.5%.

GDP (MoM) – UK GDP increased by 1.8%, below the forecast of 5.5%, an improvement on previous reading of -20.4%.

Index of Services – Total gross added value fell by 18.9%, below previous reading of -10.7%.

Industrial Production (MoM) (May) – Industrial production increased by 6.0%, better than the previous reading of -20.2%.

Industrial Production (YoY) (May) – Industrial production dropped by 20.0% YoY.

Manufacturing Production (YoY) (May) – Manufacturing production fell by 22.8%, compared with the same time period last year.

Manufacturing Production (MoM) (May) – Output produced by manufacturers increased by 8.4% MoM, better than the forecast of 8.0%.

Monthly GDP 3M/3M Change – GDP fell by 19.1% in the previous three months.

Trade Balance (May) – Trade balance fell by 2.81B in May.

Trade Balance Non-EU (May) – Non-EU trade balance increased by 0.65B, better than the forecast of -1.56B.

NIESR GDP Estimate – NIESR estimates GDP fell by 21.2%, worse than the forecast of -18.0%

Core CPI (YoY) (Jun) – Prices of goods and services increased by 1.4% YoY, beating the forecast of 1.2%.

Core CPI MoM (MoM) (Jun) – Consumer prices increased by 0.2%, better than the forecast of -0.1%.

Core PPI Output (MoM) (Jun) – Producer prices came in at 0.0%, below expectations of 0.1%.

Core PPI Output (YoY) (Jun) – Producer prices came in at 0.5% YoY, below expectations of 0.6%.

Core RPI (MoM) (Jun) – Retail prices increased by 0.2, better than the previous reading of 0.0%.

Core RPI (YoY) (Jun) – Retail prices increased by 1.3% YoY in June.

CPI (MoM) (Jun) – Consumer prices increased by 0.1%, above expectations of a 0.2% decline.

CPI (YoY) (Jun) – Consumer prices increased by 0.6% YoY, above the forecast of 0.4%.

CPI, n.s.a (Jun) – Consumer prices (NSA) in June remained unchanged at 108.50.

PPI Input (MoM) (Jun) – Input costs increased by 2.4% in June, below the forecast of 3.0%.

PPI Input (YoY) (Jun) – Input costs declined by 6.4% in June YoY, after decrease by 9.4% in May.

PPI Output (YoY) (Jun) - The price of goods sold by manufacturers decreased by 0.8% YoY, after a previous decline by 1.2%.

PPI Output (MoM) (Jun) - The price of goods sold by manufacturers increased by 0.3%, following a previous decline by 0.2%.

RPI (MoM) (Jun) – The retail price index increased by 0.2% in July, after it declined by 0.1% in May.

RPI (YoY) (Jun) – Price of goods and services for consumption increased by 1.1% YoY in July, above the forecast of 1.0%.

House Price Index (YoY) – House prices increased by 2.1% in June YoY, higher than 1.1% increase in April.

Average Earnings ex Bonus (May) – Average earnings are expected to increase by 0.5%, following a previous reading of 1.7%.

Average Earnings Index +Bonus (May) – Pay for labour, including bonuses reached a low of 1.0% in April, following an increase by 2.4%, 2.8%, and 3.1% in January, February, and March.

Car Registration (YoY) (Jun) – New car registrations declined by 89.0% YoY, and has been declining YoY since January.

Car Registration (MoM) (Jun) – New passenger car registrations increased by 368.6% in May, reversing the decline by 98.3% observed in April.

Claimant Count Change (Jun) – Unemployment claims hit a high of 856.9K in April from 12.1K in March, and is expected to reverse to 250.0K in June after reaching 528.9K in May.

Employment Change 3M/3M (MoM) (May) – The number of employed people in the UK increased by 6K in April, following a 211K increase in March.

Unemployment Rate (May) – Unemployment rate increased by 3.9% in March and April.

GfK Consumer Confidence (Jul) – Consumer confidence is expected to come in at -26, an indication of continued pessimism in the UK.

Retail Sales (MoM) (Jun) – The value of sales at the retail level across the country increased by 12.0% in May, a reversal of fall in prices observed three months to May.

CFTC GBP speculative net positions – Speculative trading positions in the U.S. futures market declined by 16.4K as of June 10.


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