U.K. consumer price inflation data for the month of December is set to release tomorrow. According to consensus expectations, the headline print is expected to remain stable at 1.5 percent year-on-year, the same as in November, the lowest rate in three years. Meanwhile, the core inflation had stayed at 1.7 percent.
The Bank of England, during its December policy meeting, stated that it anticipates the headline inflation to decelerate further to about 1.25 percent by spring 2020; however, it is likely to rise a bit above the central bank’s 2 percent target towards the end of the forecast period.
The inflation figures about to be released tomorrow might be restrained a bit by the appreciation of the pound over the month; however, the large run-up in oil prices in December might act as an offset, said Wells Fargo in a research report.
At present, the market expects U.K. headline inflation to come in at 1.5 percent and core inflation to come in at 1.7 percent in December. The retail sales data is also set to release tomorrow.
“Following a surprise fall in November, retail sales is expected to rise 0.8 percent month-over-month”, added Wells Fargo in a research report.