The Week Ahead: Central bank meetings and UK inflation

 calendarTuesday 12 December

  • UK consumer price inflation, November – Office for National Statistics
  • UK house price index, November – Office for National Statistics
  • UK producer price index, November – Office for National Statistics
  • Ashtead (Q2 results)

The UK inflation rate was remained at 3 per cent in October despite expectations it would modestly rise. Graham Spooner, investment research analyst at The Share Centre, expects inflation to fall back in November or soon after before nudging up again later next year.

He says: “The falls in the pound seen after the EU referendum in 2016 have created one-off inflationary pressure. Sooner or later this effect will begin to ease, and indeed we may have seen inflation peak, with it set to fall back. However, the pound also fell after the 2017 election, and this effect has yet to show up in the inflation data.”

Wednesday 13 December

  • UK Labour market – Office for National Statistics
  • US consumer price index, November – US Bureau of Labor Statistics
  • Residential market survey – Royal Institution of Chartered Surveyors
  • FOMC Two-day meeting
  • FED, Monetary Policy Committee meeting and minutes

Is a December rate hike still on the table? Having raised rates twice this year, Spooner says of the three central banks covering the US, UK and Euro area, “the Fed is the most likely to announce an increase in interest rates”.

Thursday 14 December

  • Bank of England monetary policy meeting
  • European Central Bank meeting
  • Retail sales in Great Britain, November – Office for National Statistics

After increasing them the last time it met, the Bank of England is unlikely to announce any change, Spooner says, although “the minutes may hint at the likelihood of an increase in rates early next year”. Meanwhile, the ECB may focus on tapering quantitative easing. Spponer adds: “Recent purchasing managers’ indexes have pointed to the strongest growth in the euro area in many years, but also pointed to rising cost pressures.”