Daily Economic Outlook: 28th August 2015

Amidst ongoing concerns about the outlook for global growth, yesterday's much stronger-than-expected second estimate of US Q2 GDP, which rose by an annualised 3.7%, compared to a 2.3% first estimate and a 0.6% gain in Q1, provided some reassurance that the US economy may be more resilient than previously thought.

Today, second estimate of UK Q2 GDP is scduled to release. The first estimate indicated that activity picked up by 0.7% q/q from a 0.4% print in Q1. The preliminary figure is expected to be repeated, there will be some interest in the expenditure breakdown which is anticipated to show a strong, albeit likely temporary, contribution from net trade, says Lloyds Bank. 

"Fears that the recent relapse in oil prices is set to push the euro area back into deflation could be countered by today's German HICP inflation print for August where a 0.1%y/y outturn for the third month is expected in a row, although the risks are tilted to the downside. However, in the US, the Fed's preferred inflation measure-the PCE deflator-is expected to edge down from 0.3%y/y in June to 0.2% in July", adds Lloyds Bank.