UK DATA: Footfall Drops Further on June Heatwave, Remaining Subdued

Swedish GDP rose 0.5% M/M in April, after 1.5% in March. It brings 3m/3m growth back into positive territory at 0.4% (vs -0.2% prior), though as always a pinch of salt should be taken with the monthly data, which can be volatile and revision prone (March was revised down from 1.9% initial). The positive reading is consistent with yesterday’s Business Survey, which noted that while the war "does not seem to have significantly affected the current economic outlook it risks posing a new challenge to the recovery". Downside growth risks, a subdued labour market and low underlying inflation readings are keeping the Riksbank patient with respect to rate hikes for now. 

• The April rise in GDP was driven by private sector production (+1.7% M/M), specifically industry (4.2% M/M vs -1.6% prior) and services (0.5% M/M vs 2.2% prior). Construction remains a laggard on a growth rate and levels basis. On a 3m/3m basis, private sector production was 0.1% (vs -0.6% prior) in April.
• Household consumption fell 0.8% M/M in April. However, Statistics Sweden now publishes consumption data at a higher – and less lagged – frequency. May consumption rose 0.7% m/m, meaning 3m/3m growth was 0.7% in May and 0.6% in April.

Gilts rally at the open with crude lower through Asia hours.

• Markets seem relatively relaxed when it comes to the latest rounds of fire between the U.S. & Iran, which have already ceased, with both sides pointing to the retaliatory nature of their attacks.
• Gilt futures +4 at 87.78, staying below yesterday’s high.
• Initial support and resistance located at 87.28 and 88.65, respectively. A short-term bullish pattern remains intact within a longer run bearish theme.
• Yields little changed across the curve, 10s have retethered to 4.90%. Bulls have been unable to force a meaningful break below 4.80% in recent times, while bears haven’t managed to retest 5.00% during the rebound in yields.
• The potential for further fiscal tightening (under the current Labour leadership) has come to the fore in the local press after The Times reported that Chancellor Reeves has “warned that the government will have to consider further tax rises to help fund defence in future because “borrowing can’t be the only answer”.” The Times notes that this “raises the prospect of further tax rises in the autumn budget”, contingent on PM Starmer & Reeves remaining in the current posts (which assumes Starmer can withstand any leadership challenge that is launched between now and then).
• Little of note on the UK calendar today, which will leave focus on spillover from energy price swings and the U.S. CPI release.

We have published and e-mailed to subscribers the MNI ECB Preview, found here: https://media.marketnews.com/ECB_Preview_Jun2026_01dfde3528.pdf

• See the report for MNI analysis including July hike prospects and the market set-up
• A latest summary of 27 analyst views in a fast moving environment
• Expectations for fresh economic projections to be announced with the decision
• A detailed review of pertinent ECBspeak
• Key macro developments since the last ECB meeting