Key Economic Events to Watch This Week – Feb 3rd

With markets all set ablaze by talk of tariffs over the weekend, you could be forgiven for losing sight of economic markers and reports for the week ahead. This week brings several key events we will be watching that could impact sentiment and monetary policy.

This week’s economic events will provide crucial insights into inflation, employment, and central bank policies on both sides of the Atlantic. Markets will be particularly focused on labor market data in the US and interest rate decisions in the UK, as these factors could influence future monetary policy paths. From central bank decisions to employment reports, here’s a breakdown of the most important economic updates to watch.

Tuesday, February 4

UK BRC Like-for-Like Retail Sales (January) – The British Retail Consortium’s retail sales data provides an early look at consumer spending trends in the UK. Given ongoing inflationary pressures and cost-of-living concerns, this report will indicate whether retail demand remains resilient or is starting to wane.

Analysts anticipate a modest increase in retail sales.

Thursday, February 6

Bank of England (BoE) Interest Rate Decision – The BoE is set to announce its latest interest rate decision, with markets expecting a cut in the benchmark from 4.75% to 4.5%. Markets will be looking for signals on future rate trajectories amid persistent inflation and slowing economic growth.

BoE Governor Andrew Bailey’s Speech – Shortly after the rate decision, Governor Bailey will address the public and financial markets. His comments will provide insight into the BoE’s economic outlook and potential policy moves in the coming months.

Wednesday, February 5

US ADP Employment Change (January) – This report tracks private sector employment growth and is often viewed as an early indicator of the official nonfarm payrolls data. A strong or weak reading could influence market expectations for the Federal Reserve’s next moves.

Economists forecast an increase of approximately 150,000 private-sector jobs in January, indicating a steady, albeit slowing, pace of employment growth.

Friday, February 7

US ISM Services PMI (January) – The ISM Services Purchasing Managers' Index (PMI) measures business activity in the services sector, which comprises the majority of the US economy. A strong reading could reinforce confidence in economic expansion, while a weaker figure may raise concerns about slowing growth.

Projected to register at 53.8, suggesting continued expansion in the services sector, though at a slightly moderated pace compared to previous months.

US Nonfarm Payrolls (January) – One of the most closely watched indicators of US economic health, the nonfarm payrolls report will show how many jobs were added in January. It also includes important details on wage growth and unemployment rates, which could impact Federal Reserve policy expectations.

Markets are expecting to see around 165,000 jobs added in January, with the unemployment rate holding steady at 4.1%