Tuesday's session brought UK CPI and PPI figures. The Consumer Prices Index (CPI) rose by 0.2% in the year to December 2015, compared with a 0.1% rise in the year to November 2015. Analysts were anticipating 0.1% increase. Although this is the first month since January 2015 for which the rate has exceeded 0.1%, this continues the trend since early 2015 of the rate being very close to zero. Movements in transport costs, particularly air fares and to a lesser extent motor fuels, were the main contributors to the rise in the rate. Downward pressures from prices for alcohol and tobacco along with food and non-alcoholic beverages partially offset the rise.
The price of goods bought and sold by UK manufacturers, as estimated by the producer price index, continued to fall in the year to December 2015. Crude oil continued to drive down input prices, feeding through to a drop in output prices of petroleum products.
Factory gate prices (output prices) for goods produced by UK manufacturers fell 1.2% in the year to December 2015, compared with a fall of 1.5% in the year to November 2015. The overall price of materials and fuels bought by UK manufacturers for processing (total input prices) fell 10.8% in the year to December 2015, from a fall of 13.1% in the year to November 2015.
As for tomorrow UK job data will be published. Number of unemployed is expected to rise by 4,100, while Unemployment Rate should stay at 5.2%. In the US part of the session CPI, Building Permits and Housing Starts figures are scheduled for a release. Analysts predict no change in CPI. Building Permits are expected to decline to an annual rate of 1.20 million, while Housing Starts should increase to 1.19 million.
Figures to watch:
Claimant Count Change/Unemployment Rate (Wednesday 10:30)
Building Permits/Housing Starts (Wednesday 14:30)
CPI (Wednesday 14:30)
