UK investors have plenty of reasons to be cheerful right now as the macro data all seems to be pointing towards a gentle glide path for the economy into Christmas and the New Year.

Last week we had a positive surprise courtesy of the August GDP (gross domestic product) print, which showed economic activity turned positive over the summer.

As PwC chief economist Barret Kupelian commented, the economy ‘reached cruising speed north of 1% year-on-year in August with all sectors of the economy growing’.

This came on the back of some sluggishness in previous months, but ‘we expect the positive momentum to continue given some of the tailwinds we see’ added Kupelian.

There was good news for the Bank of England too, as wage momentum slowed in the three months to August – private sector regular pay growth, the bank’s preferred measure, slowed to 4.8%, well below last summer’s peak and heading towards the 3% to 3.5% range the bank sees as consistent with its 2% inflation target.

Talking of which, September’s consumer price index came in at an annual rate of 1.7%, below target and below expectations, thanks to lower energy costs and a sharp drop in service sector inflation.

All of which ought to give the Monetary Policy Committee the confidence to cut interest rates by another 0.25% in November, so the thinking goes.

Talking of rate cuts, the European Central Bank meets today (17 October) with the market already pricing in a 0.25% cut due to lower growth and lower inflation with downside risks to the eurozone economy if it doesn’t act.

The bank has already downgraded its estimates for real GDP growth across the zone, and inflation across the four main economies of France, Germany, Italy and Spain is well below its 2% target. 

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