Week ahead: Powell to commit to more rate hikes in Jackson Hole speech

The world’s investors will be closely watching the annual gathering of the cream of the central banking crop at this year’s Jackson Hole symposium in the state of Wyoming.

London’s premier FTSE 100 index notched a reasonable performance last week, squeezing out a 0.66 per cent gain to close at 7,550.37 points.

Its mid-cap rival, the FTSE 250, which tends to move in tandem with the health of the UK economy, fared much worse, shedding over two per cent to finish the week at below the 20,000 point mark.

Traders are bracing for a string of speeches from the world’s top central bankers at the annual monetary conference this week, with US Federal Reserve chief Jerome Powell’s remarks taking centre stage on Friday.

Powell is expected to hint to market participants and Jackson Hole attendees that the Fed will keep raising interest rates even if the US tips into a recession.

Inflation across the pond has soared, but new figures released earlier this month suggested price rises have peaked. Inflation dipped to 8.5 per cent, down from a 40-year high of 9.1 per cent, a much bigger fall than Wall Street expected.

On these shores, energy watchdog Ofgem announces its decision on how much the bill cap will rise in October.

“It looks increasingly likely that the price cap rise could end up rising by a little north of 80 per cent,” Sanjay Raja, senior economist at Deutsche Bank, said. 

New PMIs for the services and manufacturing industries on Tuesday will be closely watched for any indication of the global economic slowdown weighing on UK output.

“Labour shortages, including elevated recruitment difficulties, should also continue to keep output growth tempered, with the weaker demand outlook dampening firms’ expectations as well,” Raja added.