The general election countdown starts today with the dissolution of Parliament, giving political parties five weeks until 12 December to campaign. Meanwhile, the focus is on German industrial production data and the Bank of England’s latest interest rate decision.
Thursday, 7 November
07:00 (GMT) – German industrial production (IP) – Previous: 0.3%; Forecast: -0.1%
IP data measures output of factories and mines in the country and is a major indicator of the strength of its manufacturing sector. Of late, the data from Europe’s powerhouse has been rather poor, with the latest manufacturing Purchasing Manager’s Index (PMI) showing major contraction in October at 41.9. Any further signs that Germany could fall into recession in the final quarter of 2019 could be devastating for the single currency. However, better-than-expected data could be a sign of a possible recovery.
12:00 – Bank of England interest rate decision – Previous: 0.75%; Forecast: 0.75%
While, there is zero expectation that the Bank of England will change interest rates, investors will watch closely the voting pattern among the Monetary Policy Committee’s (MPC) nine members. Over the past year, all nine have followed suit, backing leaving rates unchanged as the Brexit saga continued. However, with the latest Brexit delay, uncertainty over the upcoming election outcome and the US cutting rates three times now, there could be dissent in the ranks. Some economists predict that two members may back a rate cut, but that will not be enough to force any major changes. However, even a hint that the MPC believes UK Plc may require some stimulus could send the highly sensitive Pound into a tailspin.
Mark Carney’s press conference at 12:30 is a must-watch too. The BoE governor tends to hold his cards very close to his chest, but could the latest Brexit setback (albeit with a better deal on the table) make him open up to investors?
Confidence is all you need