London Daily

Focus on the big picture.
Sunday, Feb 01, 2026

Londoners brace for blockbuster economy week with interest rate hike and prices  data

Londoners brace for blockbuster economy week with interest rate hike and prices data

Bank of England tops the bill in a key week that will set the tone for the economy and consumers into 2023
Londoners are facing a blockbuster week for the economy, one which will set the tone for homeowners, consumers and investors alike into 2023.

We will find out if there is hope that inflation may have peaked in the run up to Christmas during a cost-of-living crisis with interest rates poised to go up, and there will also be numbers on joblessness and average earnings.

The Bank of England is top of the bill, with its December announcement on interest rates at high noon on Thursday. A hike is all but certain and will pile pressure on mortgage holders, with policymakers determined to tame double-digit inflation.

City experts agree that the only question is how big the Monetary Policy Committee’s hike will be after it voted for 0.75% last time, which took base rates to 3%. Andrew Goodwin, chief UK economist at Oxford Economics predicts a “pivot back to a 0.50% rise,” adding:

“There’s a good chance a minority of members will support a smaller rise or even keeping rates unchanged, which would support our view that investors remain too bullish on how high rates will peak.” Markets currently expect the BoE’s base rate to top out between 4.5% and 4.75% as the MPC tries to bring inflation down toward its 2% target

Its nine members will have plenty to discuss before their rate vote from a slew of important numbers due out earlier in the week.

First up is the monthly number on the size of the economy. Due on Monday at 7 a.m., the gross domestic product reading tracks the value of all the goods and services produced in the UK and will shed further light on whether it is already in recession.

The widely accepted recession definition kicks in with two consecutive quarters of contraction. After a decline in the third quarter, the data won’t take the UK past that line until the end of December. But the October numbers will offer another signpost on the journey, with many economists already convinced recession has arrived, while the Bank of England itself says it is on the way.

According to forecasts from Deutsche Bank, October GDP will rise by 0.4%, bouncing back from a drop of 0.6% in September, which was largely driven by the public holiday held for the funeral of Queen Elizabeth II.

Sanjay Raja, chief UK economist at Deutsche, predicts that when fourth quarter data arrives, it will indicate recession, which he expects ”to last four quarters, with GDP shrinking by around 1.5% peak-to-trough.” He adds: “The ongoing cost of living crisis, elevated economic uncertainty, and rising cost pressures all point to a deteriorating outlook in the months ahead.”

So far, the jobs market has been resilient during the downturn. Employment data, out on Tuesday at 7 a.m., is expected to show a relatively low jobless rate at 3.6%. Average earnings data will be paid close attention by the BoE as it fights inflation. HSBC estimates that the weekly rise in pay will reach 6.2%

Wednesday will also be a busy day, bringing headline inflation data for November. HSBC expects it ease back slightly to 10.9% from 11.1% in October. But that will leave it significantly above the BoE’s official target of 2%, leaving the way wide open for rate hikes.

But James Hughes, chief analyst at Scope Markets said: “It’s vital to remember that the inflation we saw a year ago has not been sustained. Wheat and crude oil are now back at level seen before the Russian invasion of Ukraine, suggesting that some significant contraction will be seen here in the next few months.”

By the end of a stellar week for economic data, Londoners should have a clearer picture of where they stand in terms of recession, the cost-of-living crisis and the outlook for interest rates and mortgage costs.
Newsletter

Related Articles

0:00
0:00
Close
New Epstein Files Include Images of Former Prince Andrew Kneeling Over Unidentified Woman
Starmer Urges Former Prince Andrew to Testify Before US Congress About Epstein Ties
Starmer Extends Invitation to Japan’s Prime Minister After Strategic Tokyo Talks
Skupski and Harrison Clinch Australian Open Men’s Doubles Title in Melbourne
DOJ Unveils Millions of Epstein Files, Fueling Global Scrutiny of Elite Networks
France Begins Phasing Out Zoom and Microsoft Teams to Advance Digital Sovereignty
China Lifts Sanctions on British MPs and Peers After Starmer Xi Talks in Beijing
Trump Nominates Kevin Warsh as Fed Chair to Reorient U.S. Monetary Policy Toward Pro-Growth Interest Rates
AstraZeneca Announces £11bn China Investment After Scaling Back UK Expansion Plans
Starmer and Xi Forge Warming UK-China Ties in Beijing Amid Strategic Reset
Tech Market Shifts and AI Investment Surge Drive Global Innovation and Layoffs
Markets Jolt as AI Spending, US Policy Shifts, and Global Security Moves Drive New Volatility
U.S. Signals Potential Decertification of Canadian Aircraft as Bilateral Tensions Escalate
Former South Korean First Lady Kim Keon Hee Sentenced to 20 Months for Bribery
Tesla Ends Model S and X Production and Sends $2 Billion to xAI as 2025 Revenue Declines
China Executes 11 Members of the Ming Clan in Cross-Border Scam Case Linked to Myanmar’s Lawkai
Trump Administration Officials Held Talks With Group Advocating Alberta’s Independence
Starmer Signals UK Push for a More ‘Sophisticated’ Relationship With China in Talks With Xi
Shopping Chatbots Move From Advice to Checkout as Walmart Pushes Faster Than Amazon
Starmer Seeks Economic Gains From China Visit While Navigating US Diplomatic Sensitivities
Starmer Says China Visit Will Deliver Economic Benefits as He Prepares to Meet Xi Jinping
UK Prime Minister Starmer Arrives in China to Bolster Trade and Warn Firms of Strategic Opportunities
The AI Hiring Doom Loop — Algorithmic Recruiting Filters Out Top Talent and Rewards Average or Fake Candidates
Amazon to Cut 16,000 Corporate Jobs After Earlier 14,000 Reduction, Citing Streamlining and AI Investment
Federal Reserve Holds Interest Rate at 3.75% as Powell Faces DOJ Criminal Investigation During 2026 Decision
Putin’s Four-Year Ukraine Invasion Cost: Russia’s Mass Casualty Attrition and the Donbas Security-Guarantee Tradeoff
Wall Street Bets on Strong US Growth and Currency Moves as Dollar Slips After Trump Comments
UK Prime Minister Traveled to China Using Temporary Phones and Laptops to Limit Espionage Risks
Google’s $68 Million Voice Assistant Settlement Exposes Incentives That Reward Over-Collection
Kim Kardashian Admits Faking Paparazzi Visit to Britney Spears for Fame in Early 2000s
UPS to Cut 30,000 More Jobs by 2026 Amid Shift to High-Margin Deliveries
France Plans to Replace Teams and Zoom Across Government With Homegrown Visio by 2027
Trump Removes Minneapolis Deportation Operation Commander After Fatal Shooting of Protester
Iran’s Elite Wealth Abroad and Sanctions Leakage: How Offshore Luxury Sustains Regime Resilience
U.S. Central Command Announces Regional Air Exercise as Iran Unveils Drone Carrier Footage
Four Arrested in Andhra Pradesh Over Alleged HIV-Contaminated Injection Attack on Doctor
Hot Drinks, Hidden Particles: How Disposable Cups Quietly Increase Microplastic Exposure
UK Banks Pledge £11 Billion Lending Package to Help Firms Expand Overseas
Suella Braverman Defects to Reform UK, Accusing Conservatives of Betrayal on Core Policies
Melania Trump Documentary Sees Limited Box Office Traction in UK Cinemas
Meta and EssilorLuxottica Ray-Ban Smart Glasses and the Non-Consensual Public Recording Economy
WhatsApp Develops New Meta AI Features to Enhance User Control
Germany Considers Gold Reserves Amidst Rising Tensions with the U.S.
Michael Schumacher Shows Significant Improvement in Health Status
Greenland’s NATO Stress Test: Coercion, Credibility, and the New Arctic Bargaining Game
Diego Garcia and the Chagos Dispute: When Decolonization Collides With Alliance Power
Trump Claims “Total” U.S. Access to Greenland as NATO Weighs Arctic Basing Rights and Deterrence
Air France and KLM Suspend Multiple Middle East Routes as Regional Tensions Disrupt Aviation
U.S. winter storm triggers 13,000-plus flight cancellations and 160,000 power outages
Poland delays euro adoption as Domański cites $1tn economy and zloty advantage
×