The headline rate of inflation for goods leaving the factory gate (output prices) rose 3.0% on the year to November 2017, up from 2.8% in October 2017. Prices for materials and fuels (input prices) rose 7.3% on the year to November 2017, up from 4.8% in October 2017. All industries provided upward contributions to both input and output annual inflation; the largest contributors to the change in the annual rates were crude oil and petroleum products respectively. Core input inflation was 4.6% on the year to November 2017, up from 3.4% in October 2017.

Focus of the Wednesday's session was on UK job figures. There were 32.08 million people in work, 56,000 fewer than for May to July 2017 but 325,000 more than for a year earlier. There were 1.43 million unemployed people (people not in work but seeking and available to work), 26,000 fewer than for May to July 2017 and 182,000 fewer than for a year earlier. The unemployment rate (the proportion of those in work plus those unemployed, that were unemployed) was 4.3%, down from 4.8% for a year earlier and the joint lowest since 1975. Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.5% including bonuses and by 2.3% excluding bonuses, compared with a year earlier.

From the UK, on Thursday, Retail Sales figures were released. The underlying pattern in the retail industry in November 2017, as suggested by the three-month on three-month measure remains one of growth, with the quantity bought increasing by 0.8%. When compared with October 2017, the quantity bought in November 2017 increased by 1.1%, with household goods stores showing strong growth at 2.9%. Retailers’ feedback suggests that “Black Friday” events contributed to the monthly increase in household goods stores, with electrical household appliances making the largest contribution to the growth.

However, focus of the session was on BoE's interest rate decision. Last week’s breakthrough in Brexit talks has reduced the risk of a disorderly British departure from the European Union and may boost economic confidence, the Bank of England said on Thursday after it left interest rates unchanged. BoE policymakers voted unanimously to keep rates at 0.5 percent, as expected, a month after raising them for the first time in more than a decade as inflation approached its highest level in nearly six years. Prime Minister Theresa May secured agreement from the European Commission last week that Britain had made sufficient progress in preliminary talks to move on to negotiating a transition agreement and a longer-term trade deal.

“This would reduce the likelihood of a disorderly exit, and was likely to support household and corporate confidence,” the BoE said, adding that it would consider progress on Brexit more closely when it updates its forecasts in February. The BoE’s Monetary Policy Committee stuck to its view from last month that interest rates were only likely to need to rise gradually. “The committee remained of the view that, were the economy to follow the path expected in the November Inflation Report, further modest increases in Bank Rate would be warranted over the next few years,” the BoE said.

This week markets will be looking at:

Public Sector Net Borrowing (Thursday 10:30)

Current Account (Friday 10:30)

Final GDP (Friday 10:30)