Last week it was all about the so called “short-term” statistics (namely international trade, manufacturing production, construction output …). Let’s see what this week is going to offer.
Tuesday will be inflation day with data for October. According to the Bank of England forecasts, CPI year on year growth would peak in the last quarter of the year and it is expected to be around +3.1% in October after the +3.0% registered in September. Core inflation (the index which excludes volatile items such as energy, food, alcohol and tobacco) was also higher than the 2% target (+2.65%) and this pushed the BoE to increase their Bank rate by 0.25. As Lee wrote in the first days of November, this was the first increase in 10 years.
The next day will be the turn of labour market data. After months of negative growth for real wages, it will be interesting to see if wages in September have started to rise as much as inflation. Expectations are against this hypothesis and a growth of 2.1% is predicted. This would mean that in September real wages will have been squeezed by 0.9%.
On the other hand, unemployment rate is expected to remain steady at a strong 4.3% level.
On Wednesday, flash productivity data will be released for the third quarter of 2017. Sluggish productivity has been the key economic issue in the years after the great recession. UK productivity used to grow by 2% per year before 2008, after that the situation has dramatically changed. The current level of productivity per hour (2017 q2) is lower than the one registered in q4 2007. Productivity growth performance will also be the key for the next budget which the Chancellor is going to deliver on November, 22nd.