Week Ahead (9 August)
Monday, 9 August – Commission to conclude consultation on standardisation in EU
The European Commission will conclude its consultation on standardisation throughout the EU on Monday. As part of the consultation, the Commission sought feedback on issues including how the EU can make the standardisation process more effective and how it can better promote global leadership in standard-setting.
On 27 May 2021, a joint non-paper of 17 member states was presented at the Competitiveness Council highlighting issues around the future of EU standardisation. The 17 member states who signed the non-paper said that standardisation of personal protective equipment and medical devices allowed EU member states to react effectively to the Covid-19 pandemic. However, the document called on the EU to develop “state-of-the-art harmonised standards” to allow member states to deliver on policy objectives including the European Green Deal and the digitalisation of industry.
The Commission hopes that the consultation will allow the EU to be more “assertive and strategic” at international level and allow the EU to better adapt to the standardisation needs of Europe’s green and digital transformations.
Wednesday 11 August – German Consumer Price Index as Weidmann questions ECB pandemic emergency purchase programme
Final German inflation figures for July 2021 will be published on Wednesday. Preliminary figures suggest the inflation rate is at its highest level since 2008 at 3.8% - up from 2.3% in June. Although the increase is partly due to one-off effects, the 3.8% figure is causing alarm in a country with an historical aversion to inflation.
Perhaps with this in mind, Bundesbank President and ECB Governing Council Member Jens Weidmann told the Welt am Sonntag newspaper that the ECB would have to tighten policy to counteract inflation, saying of the ECB’s pandemic emergency purchase programme (PEPP) that “The first P stands for pandemic and not for permanent. It's a question of credibility." As regards the sequencing of ECB action, Weidmann indicated that he expects the central bank would first end its PEPP emergency bond purchase programme before scaling back its APP purchase plan and eventually raising interest rates thereafter. In the meantime, Weidmann warned in July that inflation in Germany will “go in the direction of the 5 per cent mark towards the end of the year”. This will cause political difficulties for any government formation following September’s federal elections.
Thursday, 12 August – UK to release GDP data for Q2 of 2021
On Thursday, the UK government will release GDP data for the second quarter of this year. The figures are expected to show lower growth than was previously forecast. Paul Dales, Chief UK economist at Capital Economics, has said that he expects growth in the second quarter to have reached 4.7%. An IHS Markit release from 23 July revealed that UK private sector growth in July was at its lowest in four months, with the slow-down attributed to shortages of staff and materials.
Slower-than-forecasted GDP growth for Q2 of 2021 may also be expected following a report released by the Bank of England’s Monetary Policy Committee on Thursday, 5 August. The BoE predicted that annual GDP growth in the third quarter of this year in the UK would be 7.7%. This is slightly lower than the 8% growth the Committee predicted in May. The committee, as was widely expected, kept interest rates at 0.1% and made no changes to the £895 billion bond-buying scheme introduced to combat pandemic-related economic difficulties.
The UK will hope that Brexit-related losses will be offset by entering into new free trade agreements. These include the trade deal with New Zealand, which is close to being agreed, according to UK Trade Minister Liz Truss. Negotiations are also ongoing for the UK to join the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP).