Economic data to lay bare challenge facing Government – amid predictions that bank holiday for Queen’s funeral will knock £2bn off GDP
- Office for National Statistics set to report inflation remains at 40-year high
- Liz Truss addressing cost of living squeeze with £150bn energy bill freeze
- Figures on wages and jobs, retail sales and GDP also set to be published
A raft of economic data will this week lay bare the challenge facing Liz Truss’s government – amid predictions that the bank holiday for the Queen’s funeral will knock £2billion off GDP.
Truss has already acted to address the cost of living squeeze by announcing a £150billion energy bill freeze.
That will ease the pressure on households and might even avert a recession, some claim.
Trouble ahead: Liz Truss has already acted to address the cost of living squeeze by announcing a £150billion energy bill freeze
But consumer pain will be in focus on Wednesday when the Office for National Statistics is expected to report that inflation remains at a 40-year high – rising to 10.2 per cent in August from 10.1 per cent in July.
Figures on wages and jobs, retail sales and GDP will also be published this week.
Next Monday’s bank holiday could present a new snag for the economy. Simon French, at Panmure Gordon, told The Sunday Times that previous one-off bank holidays had lowered output by up to £2billion.
Panmure Gordon thinks it will mean that, rather than growing by 0.1 per cent, the economy will shrink by 0.1 per cent in the current third quarter.
However, experts at Investec said the Queen’s Platinum Jubilee Bank Holiday had a less severe economic impact.
French said: ‘There are few parallels. We may not simply be talking about an extra bank holiday. There could be a prolonged period of national mourning.’
Some businesses closed for a day after the Queen’s death last week while sport and entertainment events were affected. The fresh dent to economic activity threatens to create a renewed obstacle to an economy already hit by the cost of living squeeze.
Pay is falling at a record rate in real terms – because while wage packets may be rising they still lag behind prices.
Separate labour market figures tomorrow will show whether the gap has widened even further.
But Truss’s big-spending intervention should mean the pain starts to abate as inflation eases. Some economists think it may have peaked.
Retail sales data due on Friday is expected to show a fall of 0.6 per cent in August.
Separately, GDP figures for July, published today, are expected to paint a positive picture, with the economy growing by 0.4 per cent.
That comes after a 0.6 per cent contraction in June when the four-day Platinum Jubilee Bank Holiday weekend took its toll.