The BoC holds its first monetary policy gathering for 2018 and expectations are for the Bank to start the year with an interest rate increase. In the UK, inflation is expected to have moderated in December, while both headline and core retail sales for the month are expected to have declined.
Monday is a relatively light day in terms of economic releases and events. Markets in the US will be closed in celebration of the Martin Luther King Jr. Day.
The only release worth mentioning is Eurozone’s trade data, but no forecast is currently available.
On Tuesday, the main release is likely to be the UK CPI data for December. Expectations are for headline inflation to have moderated to 3.0% yoy from 3.1%, and the core rate to have ticked down to 2.6% yoy from 2.7%. Although this would mark the first slides in 6 months, inflation is still well above the BoE’s inflation target, and it remains to be seen whether this was the peak. The Bank’s forecasts from the November inflation report suggest that inflation may continue to soften through 2018, with the headline inflation rate hitting 2.4% in the last quarter of the year. We also get the nation’s PPI data.
Read the full financial markets weekly outlook on JFD Research.