Trump and Iran Sign Framework Peace Deal in France Amid Ongoing Middle East Tensions 
Europe EV Demand Surges as Fuel Prices Rise Amid Iran Conflict 
Oil Prices Steady as U.S.-Iran Truce Uncertainty and Middle East Tensions Keep Markets on Edge 
Australia Eases Capital Gains Tax Reforms to Support Small Businesses and Startups 
German Industry Employment Falls to Lowest Level in a Decade 
Dollar Surges After Fed Holds Rates Steady, Signals Potential Tightening Ahead 
Gold Prices Rebound on U.S.-Iran Peace Deal Optimism Despite Fed Rate Hike Signals 
Canada Imposes 10% Tariff on Canned Vegetable Imports to Protect Domestic Industry 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
US Stock Futures Slip After Wall Street Rally Fueled by US-Iran Deal and Chipmaker Surge 
BOJ Signals More Rate Hikes as Inflation Risks Rise Amid Energy Price Pressures 
Italy’s Economy Outpaces Eurozone Peers as Investment Spending Fuels Growth 
Asian Stocks Surge as Oil Prices Fall and Strong US Dollar Weighs on Markets 
The United Kingdom is expected to avoid a post-Brexit recession after soft economic indicators suggest that the economy has rebounded in August after the initial deceleration in July. As the economic data have been better than expected, it is now expected that the quarterly growth in gross domestic product will stay positive during the second half of this year.
Despite better data, a further easing late this year by the Bank of England (BoE) cannot be ruled out, as the BoE has indicated that it will cut rates if its growth forecast (0.0-0.1 percent q/q in Q3) materializes. The BoE is expected to stay on hold at its upcoming meeting on Thursday but will read the minutes carefully for any changes to its easing bias.
However, a 15 basis points cut from 0.25 percent to 0.10 percent is expected in November, but it is a very close call. All three PMIs have rebounded significantly in August after sharp falls in July. Further, NIESR GDP indicator has also been better than expected. Overall, PMIs and the NIESR GDP estimate suggest a slower but still positive GDP growth in Q3, Danske Bank reported in its research note Wednesday.
Moreover, the economy has rebounded due to BoE easing, less political uncertainty after the crowning of Theresa May as PM and no triggering of Article 50. Although consumer confidence rebounded slightly in August after an initial drop, it is still lower than before the referendum. However, consumers still remain significantly quite optimistic above the levels witnessed during 2008- 2013.
In contrast, the housing market remains a risk factor. A severe housing market slowdown could lead to lower private consumption growth and hence hurt overall economic growth. However, overall, the indicators still suggest a slower house price growth and sales activity, not only due to Brexit, but also due to the higher stamp duty tax implemented in April.
"We stress that uncertainty surrounding our forecasts is higher than usual as the Brexit withdrawal negotiations are set to begin early next year. We expect EUR/GBP to continue to trade higher in the coming months due to more BoE easing, political uncertainty and considerable imbalances in the economy," the bank commented in its research report.
