Consumer price index forecast to edge up slightly in July, while US retail sales also awaited

After last week’s market turmoil caused by North Korea and the US being at loggerheads, an easing of the tensions between the two countries has seen a sense of calm return. Not only does North Korea appear to be toning down some of the belligerent rhetoric, but China has stepped in to comply with UN sanctions against the country.

So after Monday’s gains, markets are expected to move higher again at the open:

Our European opening calls:$FTSE 7374 +0.28%
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A busier day for economic figures sees the release of UK inflation data and US retail sales figures for July.

When the last set of inflation numbers were released in June they showed a sharp fall in headline CPI from 2.9% to 2.6%, a welcome decline at a time when consumers have been feeling an increasing squeeze on their incomes. This fall raised hopes that inflation may well have peaked and today’s July CPI numbers could well go further in reinforcing that belief, though most expectations are for a tick back higher to 2.7%, while core CPI is also expected to rise to 2.5% from 2.4%.

A rise would be at odds with the recent softening in recent PPI numbers, which have slipped from 20% at the beginning of the year and could come in as low as 6.9% in today’s July numbers, but in line with the Bank of England’s forecasts which suggest we could see 3% before year end.

Related: UK inflation tipped to rise again with wages forecast to stagnate

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