Soaring inflation may be showing signs of slowing in the United States, but the surge across the Atlantic seems to have lasted longer.
UK figures due on Wednesday are expected to show price increases hit 9.8% in July – the latest leg of an upward march which the Bank of England says will reach more than 13% by October.
The release forms the centerpiece of a wave of data in Britain that also includes reports covering unemployment, wage growth, retail sales and public finances.
Inflation peaks later and higher in the UK than in the US, partly because of its energy price cap mechanism which slows the pass-through of higher prices to UK households. Cornwall Insight has predicted that the typical annual bill will rise by around 81% in October, to over £3,500.
Soaring prices are putting pressure on the UK government to do more to help consumers and forcing the BOE to take drastic action to curb headline inflation already nearly five times the official 2% target.
Officials raised interest rates by half a point earlier this month, even as they expected a streak of seven quarters without growth to begin later this year.
Adding to this headache, the central bank is also embroiled in the battle to replace Boris Johnson as Prime Minister, with frontrunner Liz Truss saying she will review the BOE’s mandate if chosen by Party members. conservative.
Elsewhere, another round of rate hikes from New Zealand to Norway, signs of a slight recovery in Chinese data and Japan’s return to pre-pandemic growth could be among the week’s highlights. .
In the United States, investors will focus on the government’s July retail sales report to gauge progress in consumer spending after a slowdown in the second quarter.
Economists predict Wednesday’s release will show sales fell from the previous month, even after factoring in an expected decline in revenue related to fuel prices at petrol stations. Figures are not adjusted for inflation.
The median forecast calls for a 0.1% increase in the total value of retail revenue after a 1% gain a month earlier.
China sets its medium-term lending rate on Monday and with ample liquidity and rising inflation, the window may have closed on the potential for any cuts.
The monthly data dump also scheduled for Monday is expected to show a modest recovery in July, although the outlook remains clouded by restrictions aimed at curbing new Covid outbreaks.
In Japan, second-quarter gross domestic product data is expected to show the world’s third-largest economy has returned to its pre-pandemic size, although that is unlikely to influence Bank of Japan Governor Haruhiko. Kuroda, and his determination to stick with easing.
Later in the week, trade data will give a reading of global demand, while Japanese inflation figures may show further acceleration.
New Zealand’s central bank will make its final policy decision on Wednesday, with another half-point hike expected. This would take the official exchange rate to its highest level in seven years.
In Australia, Thursday’s unemployment data could prompt fresh bets for rate hikes if it shows more tightness in the labor market. A business sentiment index over the past week showed further gains there, with hiring, sales and profits all advancing.