UK: Q4 GDP and Carney’s speech in focus – TD Securities
The TD Securities analysts provide a brief previous of the key UK economic events lined up for release later on Tuesday.
“We're in line with consensus and the BoE in looking for Q4 GDP to come in flat on a q/q basis, but do view risks as lying to the downside, with some chance of a negative q/q print.
The big question is how big of a rebound we see in December after the surprising negative m/m result in November, where the weakness was fairly widespread.
We look for a 0.2% rebound in December GDP (mkt +0.2%), with a small gain in services (+0.2%) and IP (+0.5%).
Although after the extremely weak hard data we've so far for December across Europe (e.g. French and German IP, and several retail sales figures including in the UK), it's questionable how much the UK will be able to outperform in that environment. The December figure will be important for determining the hand-off to Q1 growth.
Also, Governor Carney is speaking before the House of Lords Economic Affairs Committee just after 3:30pm. Given that his term as Governor is up in just over a month though means that market reaction to his comments should be limited.
Deputy Governor Haskell speaks at 5pm, and his comments should be dovish given his recent dissents in favor of a rate cut.”