Today’s Bank of England inflation views poll will be looked at for signs that inflation expectations have weakened further. The last report three months ago reported that one-year inflation fell to 3.3%, the lowest level in two years.
The sterling market will, however, focus on next week’s BoE policy announcement (with no change in interest rates predicted) and critical UK data.
PM Sunak appeared to rule out a May general election yesterday, prompting speculation that it will be held in October or November.
Yesterday, markets were digesting the latest US macro news flow. Producer price inflation in February was more than anticipated. The headline PPI rate was 1.6% year on year. Meanwhile, retail sales in February underwhelmed, rising just 0.6% month on month.
Looking ahead to today, the macro focus will continue. The US economy, which has a number of releases scheduled. The diary will include industrial production for February, the regional Empire manufacturing survey, and consumer sentiment for March.