Key events in developed markets

Next week’s second quarter GDP report will be dominated by the unwinding impact of the pre-Brexit stockpiling frenzy of the first quarter. Firms will need to rebuild stocks ahead of the new October Brexit deadline, but in the meantime, many firms will have had little choice but to unwind the inventory they had previously built up. After all, stock is expensive to store (particularly given a lack of warehousing space in the UK) and comes with an opportunity cost. That’s likely to see growth flatline through the second quarter, but even when stripping out this volatility, the underlying story doesn’t look great. We’ll be watching to see if business investment resumes its downward trend, while retail spending also looked fairly lacklustre through the spring. With Brexit noise set to intensity, we don’t expect the Bank of England to move interest rates this year.