Bank of England governor Andrew Bailey speaking over the weekend said he believes that changes in financial and commercial behaviour brought on by the pandemic will persist as structural changes to the UK economy. As an example, he noted the boom in online retailing. The UK economic recovery stumbled in May, when growth slowed to 0.8%. The boost from the opening of indoor hospitality was offset by a contraction in building work and a slump in car production. Traders will look ahead to inflation data released on Wednesday and employment data on Thursday.
Commenting on the inflation outlook, European Central Bank executive board member Isobel Schnebal said she is confident that the Eurozone will not experience “excessively high inflation”. She added that interest rates would not remain low forever and it was vital for European governments to ensure that the large amounts of stimulus spending they have deployed, paves the way for a return to a sustainable growth path.
Federal Reserve Bank chairman Jerome Powell will testify before congress on Wednesday amid growing uncertainty about the US economy. Recent data such as jobless claims and business surveys have been somewhat weaker than expected and inflation data due for release on Tuesday will be keenly eyed by traders.