UK: Deutsche Bank – Data and Survey Overview

Deutsche Bank's Outlook on Upcoming UK Economic Data

Deutsche Bank anticipates a packed schedule for UK economic indicators, projecting a rise in Net Consumer Credit, a partial recovery in Mortgage Approvals to 64,500, and stable readings for both the Manufacturing and Services PMIs at 52.0 and 53.9, respectively. The bank also expects the DMP survey to reveal softer forecasts for prices, wages, and inflation, alongside another negative result for employment expectations.

Key Events: Credit, PMIs, DMP Survey, and Fiscal Developments

The coming week is set to be significant, with the Spring Statement taking center stage for financial markets. Additional highlights include the release of final PMI figures, the latest DMP survey results, BRC Shop Price data, and January's credit statistics.

Deutsche Bank predicts that net consumer credit will climb to £1.7 billion, reflecting the robust start to the year seen in retail sales. Increased consumer spending is expected to be partly driven by this growth in credit. Regarding mortgage approvals, the bank foresees a partial reversal of December’s decline, with approvals rising to 64,500, supported by a recent uptick in new buyer inquiries as reported by the RICS survey.

The February DMP survey is likely to be a focal point. Analysts will monitor three main areas: first, expectations for firms’ output prices, which are projected to edge down to 3.4%; second, anticipated wage growth, expected to ease slightly to 3.5%; and third, CPI expectations, which are also forecast to moderate, in line with the recent slowdown in household inflation expectations.

As inflation continues to cool, it is expected that businesses will further lower their short- and medium-term inflation forecasts. Employment expectations remain an area of concern, with another negative outlook anticipated for the year ahead. This metric will be closely watched for any signs of improvement.

For the PMI releases, no changes are expected from the preliminary readings: the Manufacturing PMI is set to remain at 52.0, while the Services PMI is expected to hold at 53.9. The Construction PMI is forecast to show gradual improvement, reaching 48.5. The BRC Shop Price Index will also be under scrutiny, especially after a larger-than-anticipated increase in January, as analysts assess how retailers are managing discounts and promotions, particularly in the food sector.

(This report was generated with the assistance of artificial intelligence and subsequently reviewed by an editor.)