Market Insights Weekly

Lloyds report highlights that despite falling inflation, strong labor markets in the UK and US are likely to delay further interest rate cuts. Markets are retracing moves as geopolitical tensions ease, but AI-related volatility remains a factor.

Key Takeaways

• 1.UK and US economic data, including resilient labour markets and inflation trends, are driving central banks toward caution regarding the timing of future interest rate cuts.
• 2.UK inflation is expected to drop to 3.0% in January, moving closer to the 2.0% target by Q2 2026, though core and services inflation remain slightly above BoE forecasts.
• 3.The US economy shows a mixed picture: strong payroll data supports a rate 'pause,' while a government shutdown is expected to temporarily slow Q4 GDP growth to 2.8%.

Table of Contents

• UK data to provide clues on interest rate cut timing
• Geopolitical tensions ease
• Economic previews
• UK Labour market data (Dec/Jan)
• UK CPI (Jan)
• UK 'flash' PMI (Feb)
• US GDP (Q4 adv.)
• Weekly economic calendar

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