This week’s UK data release centre around prices, pay and public finances.
CPI inflation has been hovering at or near zero since February this year. All forecasts – including the Bank of England’s a couple of week ago – point to this trend persisting until the end of the year.
Data for July will be published on Tuesday and we expect the annual rate to move into negative territory from June’s zero reading. Expect the explanation to continue to centre around low food, fuel and energy prices.
Factory gate price data is also out tomorrow and the data should make a year-long run of declining producer price inflation. Falling commodity prices over the month and a stronger Sterling exchange rate should continue to keep price pressures in check.
No new is, well, no news
Later this week we’ll be publishing our own pay survey for manufacturing. The major pay periods of January and April are largely behind us and we’ve seen a slight downward drift in the average pay deal agreed across the sector.
The latest survey will cover pay settlements agreed in the three months to July.
We’re only around six weeks from the last official OBR update on the UK’s public finance projections. So far this financial year, receipts have been growing pretty strongly and borrowing is coming down in line with the July forecasts. We’re not expecting any surprises in July.
Interest rates rises
We’ve has the UK’s super Thursday and this week the world’s economy watchers will be pouring over the Fed’s minutes from their meeting in July, building up to ‘will they/won’t they’ Thursday in September. Decent growth, muted inflation and that renminbi devaluation mean it could still go either way.
In other news, this week we’ll be blogging on GCSE attainment and testing what our blog readers and twitter followers know about manufacturing around the UK.