The British Chamber of Commerce on Wednesday downgraded the British growth forecasts for the next three years on the back of weaker trade and manufacturing, which have been dragged down by a slowdown in the global economy.
Britain's economy is now expected to grow 2.4 percent in 2015, down from a previous estimate of 2.6 percent, the BCC said. According to the BCC, the UK economy will then expand 2.5 percent in 2016 and 2017, down from its previous forecast of 2.7 percent for each of those years. Slowing growth in the third quarter contributed to its downgrade, the BCC said, which also cut its outlook for the dominant services sector this year.
The BCC cut its forecast for growth in the services sector, which makes up the bulk of Britain's private sector economy, to 2.7 percent this year from 2.8 percent previously. It left the 2016 and 2017 growth outlook steady at 2.9 percent. The manufacturing sector looks set to contract 0.2 percent in 2015 and then grow in 2016 and 2017.
Germany has kicked the day off yesterday with disappointing trade data which suggests Europe’s largest economy is suffering from weakening demand at home, and abroad. German exports fell by 1.2 % month-on-month to €99bn in October (on a seasonally adjusted basis), according to the Federal Statistics Office. Imports took a sharper hit - contracting by 3.4% during the month to €78.3bn.
The data also shows that the slowdown in emerging markets has been hurting Germany this year. Over the year, German exports outside the EU have shrunk by 0.9% while sales to other EU countries are up by 6.4%.
American oil stocks dropped by more than 3.5m barrels to 485.9m last week, a bigger than expected decline which has helped support the crude price. Fears of oversupply and lack of demand have sent oil prices tumbling, with last week’s indecisive Opec meeting adding to the decline. But with US stocks down last week, demand appears to be higher than expected, so Brent crude has reacted by climbing 1.79% to $40.98.
12:00 – GBP – BoE interest rate Decision expected to stay the same at 0.5%
12:00 – GBP – Bank of England Minutes
12:00 – GBP – BoE Monetary Policy Statement
13:30 – USD – Initial Jobless Claims expected to stay the same at 269k