UK price pressures remain absent

UK data this week should highlight extremely low UK price pressures and support increasingly dovish Bank of England rhetoric, keeping downward pressure on sterling. Consensus expect headline CPI inflation (Tuesday) to be flat y/y and core CPI inflation to remain at 1.1% y/y, well below the BoE's 2% target. 

UK labour market data (Wednesday) are unlikely to suggest growing wage price pressures. Consensus expect the October unemployment rate to remain unchanged at 5.3% and average weekly earnings growth to moderate to 2.5% on a three-month y/y basis. November jobless claims are likely to increase 0.8k after a 3.3k rise in October. 

November retail sales (Thursday) should partly reverse last month's decline. Consensus expect 0.6% m/m growth in headline sales and 0.6% m/m growth in sales ex-fuel. While the sharp deterioration in November Barclaycard consumer spending growth to the slowest pace since June 2014 suggests downside risks to the forecast, its relationship with retail sales has been volatile recently.