020 7898 0500With very little data released from the UK on Friday, markets continued to reflect on the slightly cautious statement from the Bank of England. In addition, the ongoing debates surrounding the general election continue. The Tories are still predicted to win by a large margin and recent history has certainly shown us that nothing is certain in this world but any different outcome seems very unlikely at this stage.
Following on from last week’s quarterly inflation report, we have the headline inflation figure set for release on Tuesday. The consumer price index is the preferred measure of inflation and, with the BoE raising its inflation forecast last week, we expect inflation to push slightly higher and be around the 2.5% level.
On Wednesday the labour data is released with particular focus on the claimant change and the average earnings. What markets will be keen to know is whether the divergence between average earnings (salary inflation) and the consumer price index has widened further. If so, consumer spending is likely to be affected in the future.
Finally, on Thursday, retail sales data will be released. Last month we saw a drop of 1.8% in sales, and the market will be keen for this to be a one off and for growth to return. Forecasts predict this.
