The week ahead turns out to be a busy one with UK inflation, jobs and BoE coming into focus. According to the median estimates, UK’s inflation rate is expected to rise at a slower pace of 2.8% for the month of February.
This marks a slower pace of increase compared to the 3.0% increase seen in January. Core inflation rate is forecast to rise at a slower pace of just 2.5% for February compared to January’s 2.7% increase.
Consumer prices in the UK have been tipped to have posted a peak around 3.0% and are expected to average around 2.5% by the second quarter of this year. A decline in the consumer prices could potentially confirm this view. The inflation report will be released today at 09:30 GMT.
Later in the week, on Wednesday the jobs report data will be coming out. The UK’s unemployment rate is expected to remain steady at 4.4% for the period. Previously, the unemployment rate was seen rising from 4.3% to 4.4%. The increase in the unemployment rate came against the backdrop of a number of people being unemployed rising at the fastest pace in five years.
The increase in the unemployment rate was attributed to a number of young people under the age of 24 being out of work.
Further job losses could increase especially as more firms in the financial sector look to relocate back to mainland Europe. Adding to this, the bankruptcy of the U.S. toy maker Toys-R-Us which is expected to also shut its stores in the UK could further accelerate the number of people out of jobs.
Wage growth will of course remain key amid a slowing inflation rate.
UK Inflation expectations stand at 2.9%
A week ago, a survey conducted by the Bank of England showed that the UK public expected inflation to hold steady for the next few years but although above the BoE’s 2% inflation target rate.
The survey conducted in February, the public expectations for inflation for the year ahead showed a 2.9% expectation in consumer prices for 2019 and 2020. The inflation expectations were barely changed from the previous survey conducted in November. However, five-year expectations on inflation were seen rising to 3.5%.