The week ahead - 12-16 February 2024

Eurozone industrial production is expected to have declined in December. Although we expect the global manufacturing sector to bottom out this year, survey results (e.g. the manufacturing PMIs and Germany’s Ifo business climate in manufacturing) and production data for individual EZ countries indicate that the EZ manufacturing sector still contracted moving into 2024.

The Netherlands – GDP growth for the final quarter of 2023 is published on Wednesday. We expect a slight expansion (+0.1% qoq) in GDP, partly caused by a bounce back from the -0.3% qoq contraction in Q3. Recent figures, such as activity trackers and export volume indicators point toward some improvement in economic momentum. Risks are tilted to the downside, with stagnation in the broader eurozone and contracting German GDP in particular.

US - We expect CPI inflation to remain relatively benign, with a further fall in gasoline prices and a renewed fall in used car prices offsetting continued firmness in services (housing rents and medical) inflation. Headline annual inflation is expected to fall to the symbolic 2-handle for the first time since early 2021. Retail sales are expected to register more moderate growth in January, paying back for the burst of strength at the end of 2023.

UK - CPI inflation is expected to rebound on the back of a renewed rise in Ofgem’s household energy price cap, while core inflation is also expected to pick up on continued strength in services inflation. GDP growth is expected to have continued stagnating in Q4, with our base case for a mild contraction.