Upcoming UK CPI Data – Will the Inflation trend rise?
Retail sales data will be significant on Friday as UK consumer spending has remained at a fairly low level since May. Another negative footprint in October will dampen growth driven by hot inflation figures.
There was good news that the stock market has stabilized late last week after an unexpected surge in US inflation in October. While U.S. Treasury yields soared as the U.S. CPI rose 6.2% a year, U.S. Treasury yields are not recovering from their 2021 highs, so there is still a lot of debate over whether inflation will be temporary. But Treasury Secretary Janet Yellen said inflation would be under control only when the virus is under control. So, if you think that inflation will kill the positive sentiment in the stock market.
Loonie hopes a strong CPI can stop the decline. Data on consumer price index and retail sales also change in Canada. Annual inflation in September was 4.4%, the highest in 18 years. Investors have decided to move in March, although the Bank of Canada has delayed the expected timing of its first rate hike since the pandemic to two-thirds of the quarter.
If Wednesday’s data shows inflation continued to rise in October that would support an earlier rise, which would boost the Loonie, which fell to this week’s monthly low against the strong dollar. In general, officials of the UK House of Representatives Finance Committee have expressed concern about the current inflation rate. At the meeting, Bank of England Governor Andrew Bailey said: “The inflation situation is very worrisome. I want to clarify this issue. Of course, this does not mean that we want inflation to exceed its target.”
Finance Committee includes Bank of England Governor Andrew Bailey, Bank of England Monetary Analysis Chief Executive Officer and Chief Economist Hugh Phil, MPC outside Members Michael Saunders, and Dr. Here’s Catherine Mann.
In his testimony, Bank of England Governor Andrew Bailey further commented on inflation: “The Bank of England estimates, based on strong banking activity, show that the inflation excess is significant”. Bailey also said: “Nobody at the Bank of England said they would raise rates in November, but the decision in November was decisive.”
Bailey went on to say: “The meeting should proceed in the same way next month. “The decision not to complete QE ahead of schedule could raise questions about whether the Bank of England will complete its QE program in the future.”
MPC external member Michael Saunders also testified before the committee, saying the MPC “believes the overall risk of rising inflation is large enough to justify a rate hike now.” “If you put off rate hikes for too long, you have to do it a little bit faster and further away,” Saunders added. MPC members voted 7-2 at a meeting earlier this month to keep the ratio at 0.1%. “It’s a carefully balanced decision from a personal standpoint,” Hugh Pill, chief economist at
Bank, told the committee. “I agree with BOE Saunders about being late, but I also see the dangers of acting too early,” he added. The Bank of England expects inflation to rise to 5% in the second quarter of 2022, more than double the central bank’s target rate of 2%. The UK CPI is going to be released today and is expected to represent 3.9%. If UK CPI rises as expected or above, it will be the largest proportion of UK CPI growth since 2012.