US inflation; UK GDP; House prices: The macro week ahead

Proactive Investors – Next week will bring key inflation data in the US, alongside house price and gross domestic product (GDP) figures in Britain.

Eyes have been fixed on prospective interest rate cuts by both the Federal Reserve and Bank of England for some time, with a higher for longer narrative now widely accepted.

US inflation – Wednesday

Any shock readings in Wednesday’s US inflation reading for March could have these expectations up in the air.

“The big risk […] is that the rising oil price leads to the Fed and other major central banks pushing interest rate cuts further into the future,” XTB’s Kathleen Brooks explained.

Prices in North America climbed 3.1% and 3.2% in January and February respectively, above consensus estimates, while core rates, excluding food and energy prices, grew 3.9% and 3.8%.

Forecasts are for inflation to have risen 3.4% in March, according to Trading Economics, with the core rate expected to subside to 3.7%.

UK house prices – Thursday

In the UK, Thursday data from the Royal Institution of Chartered Surveyors (RICS) will delve into the health of the UK’s housing marking.

According to Halifax, property prices stagnated in March as high interest rates continue to bite, climbing 0.3% annually to £288,430, but falling 1% from February.

RICS’ survey will measure the percentage gap between respondents seeing rises and falls in house prices.

In February, this rose to -10% from January’s -18% in the least negative reading since late 2022. Trading Economics forecasts March’s reading to sit at -5%.

UK GDP – Friday

Britain sank into a technical recession late last year but economic growth has since been tipped to return, albeit slowly.

Friday’s GDP reading for February should confirm this, according to Trading Economics, which forecasts growth of 0.1% over the month, following a -0.1% contraction in January.

EY ITEM Club analysts noted public sector strikes would cap first quarter GDP ahead of the figures.

“Lower inflation, rising real incomes and actual and prospective cuts in taxes and interest rates should see momentum in the economy continue to build this year,” it added.