UK Inflation dominated yesterday’s economic calendar. The consumer price index rose more than expected to 2.7% in April, marking its highest reading in nearly four years. The producer price index (PPI) and retail price index (RPI) also exceeded economists’ consensus yesterday, as inflation continues to rise in the UK. The higher figures have drastically reduced the chance of further easing from the Bank of England in the near future. However, with yesterday’s poor labour data and prices rising it could signal a bumpy ride for the UK economy ahead.
In the Eurozone, the week started with Emmanuel Macron meeting with Angela Merkel. Macron expressed his wishes to reform the Eurozone. They jointly agreed they would need to work together to ‘deepen the EU’ and would be prepared to look at changing the EU treaties in order to do so. Yesterday, the European Union’s highest court ruled parliaments from the 28 members would need to approve a trade deal with Singapore from 2014. This ruling could cause further issues with the deal for Britain when they leave the EU. This news did however help boost the Euro against Dollar and Sterling yesterday.
Another busy economic docket today as we have a raft of high tier data released from the UK and Eurozone.
Firstly, UK average earnings are forecast to improve from March’s 2.3% to 2.4%, whilst UK unemployment is expected to remain sticky at 4.7%.
Shortly after, the Eurozone release their CPI as we gain an insight into inflation in the single currency union.