UK inflation will be in the spotlight in the coming week, especially as it comes a week after a surprise rise in US prices data that has kept markets on their toes about the likelihood of more interest rate hikes, along with a recent spike in oil and gas prices.
First there will be a jobs report from the Office for National Statistics (ONS) on Tuesday 17 October, followed a day after by 'prices day', including the consumer price index (CPI) and its siblings, which come three weeks before the next Bank of England monetary policy meeting on 2 November.
The last data from the ONS showed unemployment was 4.3% for the three months to July, which remained low by historical standards but was the third straight rise and so lifted the proportion of jobless Britains to the highest level since autumn 2021.
Economists said this suggests that higher interest rates have started to act as a drag on economic activity, but as the data also showed pay growth remained stubbornly elevated at 7.8% excluding bonuses or 8.5% including - close to the highest regular annual growth rate since records began - there were some calls for another BoE rate rise.
As well as wages, job vacancies will also be examined, which in August dipped to 989,000 in the 14th straight decline.
For inflation, a month ago the unexpected easing of CPI to 6.7% helped sway the BoE into pausing its hiking cycle.
This week there have been renewed inflation worries, not only from the US data, but also from gas prices hitting their highest point since March, due to worries about supplies being hit by pipeline disruptions and the Palestine-Israel conflict.
But economists at Berenberg said the big spike in energy prices, which pushed European headline inflation into the stratosphere, is "over".
"Unless geopolitical tensions were to escalate dramatically, the modest oil-driven rebound in energy prices in the last two months could even be partly corrected in October and November judging by current oil prices. More importantly, the surge in food prices seems to have largely run its course," they said.
Finishing off the UK economic data will be the monthly consumer confidence survey from consultants GfK, alongwith public borrowing and retail sales.
The Gfk main index increased four points to minus-21 in September, the best score since January 2022.
"This latest reading will tell us whether a renewed surge in oil prices, coupled with signs of softness in the jobs market and higher interest rates, is taking a toll or not," said analysts at AJ Bell.
US and elsewhere
Outside of the UK, Germany’s ZEW sentiment index and Canada's inflation on Tuesday, Chinese growth and industrial data on Wednesday, and US building permits and a speech from Federal Reserve chief Jerome Powell on Wednesday and Thursday will be the headline events.
US retail sales are also important, said economists at ING, as the economic outlook there is "becoming more uncertain with geopolitical tensions adding to the perception that the Federal Reserve is likely finished tightening monetary policy".
Fed speakers in recent weeks have pushed this view despite US inflation figures suggesting a certain degree of "stickiness" persisting in the services sector, with longer-dated Treasury bond yields grinding higher to amplify the monetary policy tightening.
With the market currently pricing in a one-third chance of a final Fed rate hike this year, the ING team said "that could decline further if we are right and the details of the retail sales and industrial production report show evidence of weakness".
Also worth watching out for is the Fed's new updated Beige Book on Wednesday for anecdotal evidence of a further softening in activity.
Last time, respondents showed concern about the prospects for consumer discretionary spending while commenting that the "last stage of pent-up demand for leisure travel from the pandemic era" was likely to be over.
Canada CPI data was also flagged by ING, saying if it is hot this will make a rate hike more likely, given current uncertainty over whether the Bank of Canada will hike again at the end of this month.
"A hot print could make it close to a 50-50 call. Currently, there is a one third chance priced in."