However, the focus of the session was on BoE's interest rate decision and Inflation Report. The Bank of England has trimmed its UK growth forecast for 2017 this year, saying that household spending is slowing more quickly than expected. It said consumers were being squeezed between sluggish income growth and rising inflation, and that could be seen in weak retail sales and a sharp fall in new car registrations in April. The Bank trimmed its growth forecast to 1.9% from its previous estimate of 2.0% made in February. It also held interest rates at 0.25%.
Interest rates are set by the Bank's Monetary Policy Committee (MPC), which is tasked with keeping inflation at 2%. However, in its Quarterly Inflation Report published on Thursday the Bank raised its forecast for inflation this year to 2.7% from its February forecast of 2.4%. It said that this overshoot was "entirely" due to the impact of weak sterling and that raising interest rates would not be an effective way of tackling that inflation.
This week markets will be looking at:
CPI/PPI (Tuesday 10:30)
Claimant Count Change/Unemployment Rate (Wednesday 10:30)
Retail Sales (Thursday 10:30)
Last modified on Friday, 12 May 2017
