The Week Ahead: What will Carney do at next BoE meeting?

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This week the Bank of England is widely expected to hold fire and keep interest rates at their all-time record low of 0.25 per cent and its asset-purchase target at £435bn.

However it is also anticipated that it might give more details on the health of the economy three months after the Brexit vote.

Fund Strategy looks at some key events shaping the week and highlights what to expect.

Monday 12 September

  • Tata Steel results
  • Monthly Oil Markets – OPEC report

Tuesday 13 September

  • UK Consumer Price Indices including inflation target

Consumer price inflation is expected to have risen to 0.7 per cent in August from 0.6 per cent in July, taking it to the highest level since November 2014.

IHS Global Insight chief UK and European economist Howard Archer says: “Data out on Wednesday are expected to show the labour market softened slightly in the immediate aftermath of the UK’s decision to leave the EU in the 23 June referendum but was still petty resilient.

“Retail sales are expected to have been fallen back in August after a strong increase in July. Survey evidence from the  BRC indicates that retail sales suffered in August from the fine weather deterring people from shopping and preferring to partake in leisure and outside activities.”

  • EU Employment Statistics
  • G20 GDP data – Q2 2016

Wednesday 14 September

  • UK unemployment and average earnings

Following the EU referendum, IHS expects Britain’s unemployment rate to trend gradually higher, to stand at around 5.2 per cent at the end of 2016 and 5.7 per cent at the end of 2017.

Archer says: “Despite current resilience, the UK economy still seems more likely than not to suffer an appreciable loss of economic momentum over the coming months and weakened business confidence, which is a damaging combination for employment prospects.”

Thursday 15 September

  • UK Monetary Policy Committee Meeting – interest rate decision and minutes

The IHS Markit purchasing surveys for services, manufacturing and construction showed a marked overall rebound in activity in August after the July surveys had pointed to clear contraction. As such Archer believes this has diluted the case for more stimulus in the immediate future.

“The Monetary Policy Committee now looks odds-on to sit tight on Thursday after their  September MPC meeting,” he adds.

Friday 16 September

  • US Consumer Price Index
  • European Union leaders meet in Bratislava to discuss what’s next for the block after the Brexit vote