Eco­nomic week ahead

The Daily Telegraph - Business - - Business -

Sec­ond quar­ter GDP num­bers from the US and the Euro­pean Union are ex­pected to give a bru­tal in­sight into the dam­age wrought by lock­downs. Af­ter a 5pc drop in the first quar­ter, an­a­lysts ex­pect Amer­i­can out­put to plunge 33pc for the three months to the end of June – one of its big­gest ever quar­terly falls. Af­ter EU lead­ers agreed the €750bn (£680bn) re­cov­ery fund, the GDP read­ing for the sec­ond quar­ter is not likely to be pretty. An­a­lysts es­ti­mate a con­trac­tion of around 30pc. On Thurs­day, the EU and Ger­many will is­sue their lat­est rounds of un­em­ploy­ment fig­ures. Ger­many has seen job­less claims rise sharply since March, up to 6.4pc in June. US Fed­eral Re­serve chair­man Jay Pow­ell has al­ready made it clear that the cen­tral bank is in no rush to raise in­ter­est rates from their record low of 0.25pc, but also ruled out tak­ing rates into neg­a­tive ter­ri­tory. No pol­icy changes are ex­pected at this week’s meet­ing on Wednesday. But the FOMC will likely have con­cerns about the re­cent resur­gence of virus cases stymy­ing the eco­nomic re­cov­ery.

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