Research Team at Danske Bank, suggests that in the UK, CPI inflation data for September is due which is likely to garner the investors’ attention in today’s session.
“Inflationary pressure is increasing, due mainly to the weaker GBP, which increases import prices. The trade-weighted GBP is around 18% weaker than a year ago, so potentially import prices could increase accordingly over time. We estimate CPI inflation rose to 0.9% y/y in September, from 0.6% y/y in August, due to the downward contribution from lower oil prices. We estimate CPI core inflation rose to 1.4% in September, from 1.3% in August. Although we expect CPI inflation to increase above the 2% target next year, we believe the Bank of England will see through this to support the economy, as the higher inflation is only temporary.”