UK next week: CPI, jobs, Carney and Brexit - Danske Bank

Analysts from Danske Bank think the CPI inflation print for September and the jobs report for August are the two most important releases next week in the United Kingdom, ahead of the Bank of England meeting next month.

Key Quotes: 

“In the UK, we think the CPI inflation print for September and the jobs report for August are the two most important releases ahead of the Bank of England (BoE) meeting next month. Our view is that the releases should not alter the BoE members’ views on the economy significantly and hence we still expect a 25bp Bank Rate hike next month. Markets have priced in a 60% probability of a rate hike.”

“Retail sales for September are due on Thursday, which is an indicator that usually moves markets but in reality is a very weak indicator of actual consumption growth.

“The BoE’s Mark Carney, David Ramsden and Silvana Tenreyro are testifying before the UK’s Treasury Committee on Tuesday. We will look for any hints on whether they have changed their minds on a November hike. 

“We think the EU leaders are unlikely to conclude there has been ‘sufficient progress’ in phase 1 of the Brexit negotiations (divorce bill, citizens’ rights and Irish border) to move to phase 2 (future relationship) at the EU summit next week. More negotiation rounds will be needed in November and early December.”