Likely inflation drop signals good news for workers

Burberry's latest collections recently hit the world's catwalks, as second quarter sales figures are due. Picture: Getty

Burberry's latest collections recently hit the world's catwalks, as second quarter sales figures are due. Picture: Getty

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This week looks set to bring good news for British workers, as a modest pick-up in wage growth coincides with a further dip in inflation.

Although the headline CPI rate is now significantly below the Bank of England’s 2 per cent target, this five-year low of around 1.4 per cent will be welcome relief to households who have endured years of declining real spending power.

The City will see such things as lengthening the odds on an early rate rise, although that now seems to be regarded as bad news for the economy again.

Instead, relief to beleaguered markets might come from the United States earnings season, which starts in earnest after Columbus Day today.

However, US corporations face an uphill struggle against a strengthening dollar.

WEEK AHEAD

Today

• YouGov – The polling firm has indicated it met City expectations for the last financial year.

Tomorrow

• Retail sales monitor – The British Retail Consortium’s figures for September are expected to make grim reading.

• Inflation – The headline CPI measure is expected to hit a five–year low as it slips from August’s 1.5 per cent reading.

• Burberry – Brokers at Nomura are forecasting a 9 per cent sales lift for the second quarter of the financial year.

Wednesday

• Unemployment – Jobs and average wage figures are seen as key to the Bank of England’s interest rate policy.

Thursday

• Game Digital – Two years after the video gaming chain collapsed into administration, the City is looking forward to strong results from the reborn firm.

• WH Smith – A 9.7 per cent rise in full–year profit, to £113 million, is forecast.

Friday

• Travis Perkins – The builders’ merchant’s update will be scrutinised for signs the housing boom is slowing.

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