Daily Economic Outlook: 14th August, 2015

The morning's domestic focus is likely to centre on construction data for June. With construction output estimated to have been flat over the quarter in Q2, the ONS preliminary GDP estimate assumes a rebound of 2.3% in June after declines of 0.5% and 1.3% respectively in April and May. As ONS estimates of monthly construction output are often heavily revised, the better recent tone of survey-based sectoral indicators such as the PMI and BoE Agents' scores suggests some scope for the profile of Q2 activity to be evened out. This suggests a weaker June rebound than that assumed by the ONS, with a potential offset from revisions to earlier months. 

"We look for a monthly 1.8% gain, compensated by the likelihood of more moderate declines in April and May", says Lloyds Bank.

Internationally, global risks stemming from anxieties around the Chinese outlook could be given further salience by an inconclusive outcome of today's Eurogroup meeting. Yet even if a Greek bailout package were not approved today, it still appears likely an interim solution will be found to meet Greece's payment obligations to the ECB, due on the 20 August, adds Lloyds Bank.

Meanwhile, Eurozone GDP data for Q2, following country estimates for Germany, France and Italy earlier in the morning, are expected to show quarterly growth of 0.4%, unchanged from the two previous quarters. 

According to Lloyds Bank, "The final estimates of Eurozone headline and core inflation for July are expected to confirm their initial annual prints of 0.2% and 1.0% respectively. The core rate, at a 15-month high, points to the benefit of the ECB's policy easing through a weaker exchange rate."