Events that marked the week:
Tuesday's session brought UK CPI and PPI figures. The Consumer Prices Index (CPI) rose by 0.3% in the year to January 2016, in line with market forecasts, compared with a 0.2% rise in the year to December 2015. This is the third consecutive month of small increases, with the rate in January 2016 being the same as it was in January 2015. The main contributors to the rise in the rate were motor fuels, and to a lesser extent food, alcoholic beverages and clothing. Air fare prices partially offset the rise in the rate, falling by more than they did a year ago. This followed a large increase in prices in December 2015.
The price of goods bought and sold by UK manufacturers, as estimated by the producer price index, continued to fall in the year to January 2016. This month shows the smallest decreases in both the output and input prices for the last 13 months.
Factory gate prices (output prices) for goods produced by UK manufacturers fell 1.0% in the year to January 2016, compared with a fall of 1.4% in the year to December 2015. Core factory gate prices, which exclude the more volatile food, beverage, tobacco and petroleum products, showed no movement in the year to January 2016, compared with an increase of 0.1% in the year to December 2015.
Focus of Wednesday's session was on UK job figures. The jobless rate in the U.K. held steady at a decade-low in December, while the average earnings index increased in line with expectations, painting a mixed picture of the labor market, official data showed on Wednesday. The Office for National Statistics said that the rate of unemployment held at 5.1% in the three months to December, disappointing expectations for a drop to 5.0%.
The claimant count fell by a seasonally adjusted 14,800 in January, compared to expectations for a decrease of 3,000 people, and following a drop of 15,200 a month earlier, whose figure was revised from a previously reported decline of 4,300. Meanwhile, the average earnings index, including bonuses, rose by a seasonally adjusted 1.9% in the three months to December, matching forecasts and after increasing by 2.1% in the three months to November. Excluding bonuses, wages rose by 2.0%, above expectations for 1.8% and following a 1.9% increase in the three months to November.
This week markets will be looking at:
BBA Mortgage Approvals (Wednesday 10:30)
Second Estimate GDP (Thursday 10:30)
