The Week Ahead: 31 August – 4 September '26

Imogen Bachra shares her quick take on the big themes and events likely to move markets over the coming week:

* US jobs data takes a backseat: Non-farm payrolls remains important, but the market may react less dramatically following a more hawkish-than-expected Jackson Hole speech from Fed Chair Warsh. He downplayed recent labour-market weakness and emphasised inflation, suggesting employment data may have less influence on the Fed’s reaction function.

* Eurozone inflation in focus: Germany and Italy publish flash CPI ahead of Tuesday’s euro-area reading. Headline inflation is expected to rise, driven by higher energy prices, while core inflation should remain around 2.5%. A stable core rate would suggest an energy shock requiring only a measured ECB response. A renewed acceleration in services prices would carry greater significance for ECB policy, although recent French and Spanish data suggest this is unlikely.

* UK inflation expectations: Governor Andrew Bailey speaks on Friday – the first MPC communication since July and likely the last before the September meeting. Markets will be looking for any change from his previous message that the BoE was not edging towards a rate hike.

* Fiscal policy returns to centre stage: G20 finance ministers and central bankers meet Monday and Tuesday, with global growth, imbalances and sovereign debt on the agenda. Fiscal concerns are increasingly driving markets, from the US Treasury’s policy moves to upcoming European budget decisions.

* France remains under scrutiny: The first French presidential debate produced little to change the market’s view of French fiscal and political risk. Further spread widening is likely to require a catalyst from the budget or political backdrop.

* UK fiscal risks may be underappreciated: The UK’s fiscal position could prove more worrying than France’s as the Labour Party conference and October Budget approach. The return of Parliament from summer recess could increase political and fiscal headlines, particularly around potential Budget announcements.