With focus mainly on Spain, taking the core of the three-year-old debt crisis, economic uncertainty is still on the rise while latest fundamentals fell short from offering a brighter view for the 17-nation euro economy. Coming up today, the U.K. trade balance and industrial production data could offer some catalyst to European markets, a signs that economic slowdown could be heavier than expected!
At 08:30 GMT, the London-based Office for National Statistics releases the U.K. trade figures, expected to show visible trade fell to -8500 million pounds in August, from -7149 million pounds in July. The U.K. trade balance with the whole of the world probably fell to -4000 million pounds from -2877 million pounds, while total trade in goods likely fell to -2380 billion pounds from -1517 billion pounds.
U.K. trade is persistently hammered by weakening exports and sovereign debt crisis in the euro are, the U.K. largest trading partner, given the debt woes are still risking demand for goods on local and global scale while confidence levels are still on edge and growth is turning out to be much weaker than forecast since the government started its deficit-cutting plans in a bid to boost demand for goods.
Britains economy entered a recession late last year, with the gross domestic product down for the a third straight quarter, as the euro areas largest economy is still facing headwinds from the governments austerity drive and prove-sectors indebtedness. The International Monetary Fund expects the U.K. economy would shrink 0.4 percent this year, before growing a cold 1.1 percent in 2013.
Back to the U.K. calendar on Tuesday, the ONS will publish as well the index of industrial production, expected to fall to -0.5 percent in August, from 2.9 percent in July. From a year earlier, industrial production probably eased to -1.1 percent from -0.8 percent. The index of manufacturing output is also expected to leap down to -0.7 percent from 3.2 percent and to -0.7 from -0.5 percent a year ago.
Market consensus mainly assumes that Julys exquisite gain in U.K. industrial output by the most in 25 years was just a rebound from in manufacturing from the convulsion caused by the extra public holiday for the Queens Jubilee, however total rebound is just too far from reality as the debt crisis continue to cast its gloomy shadows on the royal economy, risking the outlook of the euro areas largest economy.