Daily Economic Outlook: 8th July, 2015

With yesterday's emergency Eurogroup meeting and euro area leaders' summit re-opening talks but imparting little concrete direction, an apparent gap between the positions of Greece and its creditors in the aftermath of the referendum remains intact. A discussion of Greek proposals at today's Eurogroup conference call could help to progress matters, although it would likely represent only the beginning of a formal ESM application process that could take some time, says Lloyds Bank.

Notwithstanding the lingering Grexit anxieties, Chancellor Osborne's Budget statement is likely to provide a domestic focus. Of particular interest will be the profile of the planned fiscal consolidation through to 2020. Relative to the March 2015 Budget plans, Lloyds Bank anticipates, a smoother profile permitted both by improving public finance outturns for 2015/16 so far, and an earlier start to the consolidation, with additional savings already identified for the current fiscal year. 

Nevertheless, as Osborne will need to balance the fiscal implications of wanting to adhere to Conservative manifesto plans against those implied by his proposed update to his own Charter of Fiscal Responsibility, the precise profile of the consolidation - and therefore its drag on the economy - remains mostly an uncertain matter of political judgment, adds Lloyds Bank.

Of global interest will also be the minutes of the FOMC's June meeting. Coming in the aftermath of a meeting with a press conference and published economic projections, these are of more limited incremental value. Nevertheless, alongside the slew of upcoming Fed speakers - including Williams later this evening and Yellen on Friday - the impact of Grexit concerns through the FOMC's lens of 'financial and international developments' will be of particular interest.