The UK’s Consumer Price Index (CPI) year on year has increased at 0.6%, slightly below the forecast of 0.7%. What this means is that the household basket of goods and services that would have cost £100.00 in August last year would have cost you £100.60 last month. The CPI data for 2016 to date has been relatively low but better than figures seen last year – this being a year of historically low inflation, with the rate being around zero for much of the year.
Furthermore, PPI input m/m, this being the price of goods bought and sold by manufacturers in the UK, grew marginally at 0.2% against a more optimistic forecast of 0.6%. Investors will be waiting for Thursday when the Bank of England meet, most likely to keep monetary policy unchanged. With news so far in the UK being relatively upbeat in terms of data since Brexit, there doesn’t seem to be a convincing argument to loosen monetary policy further.
A reasonably quiet day in the Eurozone yesterday apart from the German ZEW Economic data release which came out at 0.5 points, 2.3 points less than expected. Achim Wamback, the ZEW President, commented on this by stating that "The current ambiguity of economic impulses from Germany and abroad means that forecasts for the next few months are difficult. German exports, particularly to non-EU countries, as well as industrial production figures have disappointed. By contrast, the economic environment in the European Union is improving. Overall, the ZEW Indicator of Economic Sentiment suggests that the economic situation in Germany will remain favourable in the coming six months”.
09:30 - GBP – UK Average Earnings Index 3m/y expected to decrease to 2.1%
09:30 - GBP – UK Claimant Count Change expected to increase to 1.7K
09:30 - GBP – UK Unemployment Rate expected to stay the same at 4.9%
15:30 – USD – US Crude Oil Inventories