Martin Weale, a Bank of England policymaker, has warned UK households to expect an interest rate rise in spring 2015.
It is the first time a senior Bank policymaker has given a timeframe to expect the first rise in interest rates, which have been on hold at an all-time low of 0.5% since March 2009.
He did however mention that rates could rise even sooner if wages continue rising.
CBI survey figures showed a positive picture of UK manufacturing.
Also figures published by the Society of Motor Manufacturers and Traders showed the number of cars built in the UK fell overall by 0.3% in January. However the numbers built for exports rose by 1.2% to 103,380; which is a bit of a surprise given the rising value of the pound.
The dollar rose versus most major counterparts this week on bets the Federal Reserve will continue to reduce stimulus at a pace of US$10bn per month, a practice which we would expect to strengthen the US dollar.
Investors have been dismissing lower than forecast U.S. economic data over the past two weeks, pointing to harsh winter weather as a reason for unexpected weakness in US data.
Fed officials seem to be speaking with one voice that the barrier to ceasing tapering is pretty high.
Asian stocks rose, with the regional benchmark index rebounding from its biggest drop in two weeks, after a larger-than-forecast climb in a measure of U.S. manufacturing tempered concern about global growth.
Futures on the S&P 500 advanced 0.3 percent today. The measure yesterday gained 0.6% after the Markit Economics preliminary index of U.S. factory activity increased to 56.7 in February, and data showed fewer applications for unemployment benefits last week.
Data from the Eurozone generally disappointed yesterday with services and manufacturing in the Eurozone marginally reducing for the month of February. There was a similar story from both Germany and France also causing the euro to weaken across the board
UK retail sales figures are released this morning. Changes in retail sales are widely followed as an indicator of consumer spending, which makes up a large proportion of UK economic growth. The data is forecasted to show sales in the UK fell by 1% for the month of January, thus we could see more sterling weakness today.
We are also expecting Canada's inflation figures to be released this afternoon with the rate set to increase to 1.3%; which should allow the Canadian dollar to be supported.
9.30am – GBP – Retail Sales (Jan): Expected to fall by 1%.
13.30pm – CAD – Consumer Price Index (Jan): Expected to rise to 1.3%
13.30pm – CAD – Retail Sales (Dec): Expected fall by 0.4%.
15.00pm – USD – Existing Home Sales (Jan): Expected to fall by 4.3%.