Inflation will be the theme next week as consumer price data gets released on both sides of the Atlantic.
Tuesday will bring the first update from the UK, where prices are expected to have climbed by 2.6% in December, in line with November’s increase, according to Trading Economics.
Data on Wednesday is then expected to show US inflation accelerated by 2.9% over the month, compared with November’s 2.7% uptick in prices.
Given a hawkish turn among central bankers in recent months, focus is set to be on both for clarity around the direction of interest rates ahead.
ING Economics noted an uptick in line with expectations “may go some way to easing concerns about prolonged elevated inflation readings” in the US.
“Mortgage rates have soared, consumer borrowing costs elsewhere remain elevated and the dollar has strengthened,” ING said,” all of these are counteracting the Fed’s rate cuts and we take the view that the Fed may need to push harder”.
UK gross domestic product figures for November will take centre stage on Thursday after October saw the economy unexpectedly contract by 0.1%.
Fears over stagnating economic growth, alongside stubborn inflation, have contributed to a spike in UK debt yields recently, leaving eyes on whether the economy can drum up an expected 0.1% uptick in November.