The upcoming week will place a spotlight on the UK’s inflation figures, after the previous month witnessed a surge in core prices, hitting a peak unseen for 31 years.
Simultaneously, attention in the US will be directed towards retail sales and industrial activity metrics.
The UK’s Office for National Statistics is scheduled to publish the consumer price index (CPI) on Wednesday, 19 July, at 7 am.
Last month’s CPI figures from the UK demonstrated an unexpected slowdown in May, clocking in at 8.7%. The core prices similarly defied predictions, ascending to 7.1%.
Although the inflation for food prices dipped to 18.3%, more recent data from the industry suggests a further slowdown in June.
The newly released CPI numbers will be scrutinized alongside recent robust wage data and the softening price pressures seen in the US and other countries.
On average, economists are projecting June’s headline CPI to decline to 8.2%, while core prices are expected to remain steady at 7.1%.
Deutsche Bank foresees the core CPI climbing to 7.2%, with a possibility of even higher figures. Meanwhile, strategists at Liberum anticipate core inflation to reach 7.3%.
Given the robust wage data, some economists are already forecasting a more significant interest rate hike by the Bank of England during the next assembly in August.
CMC Markets’ market analyst, Michael Hewson, remarked, “Although this week’s figures likely won’t significantly alter the expectations of a 25bps rate hike by the Bank of England in the following fortnight, a robust figure could augment pressure for a larger, 50bps increase, which presently appears to be the most probable outcome.”
