Market Report: 23 January 2017
Last week there were some very important UK, US and Chinese figures released that kept investors busy. On Tuesday the latest CPI numbers shown that UK inflation rose by 0.5% in December, which is higher than the analysts forecast of 0.3%. Year-on-year inflation rose 1.6%, the highest since 2014. Meanwhile, the UK Labour Market Report was published on Wednesday. The number of people in work declined and growth in wages slowed but not enough to have a significant impact on the unemployment rate, which remained at 4.8% in the November/December period. The last important UK release came in on Friday. The British Retail Sales fell sharply in December down to -1.9%, while the year-on-year result growth was 4.3%, weaker than the expected 7.3%.
The release of US CPI went in line with the economists’ expectations. Inflation rose 0.3% in December and 2.1% year-on-year mainly due to higher energy prices that moved up consumer inflation. There were reassuring numbers out of China showing GDP growth of 6.8%, industrial output growth of 6% and retail sales of 10.9% over 2016.
The week ahead investors will primarily focus on two economic announcements. Latest update on the UK economic growth will be given on Thursday. Analysts expect that the UK GDP rose 0.46% in the fourth quarter of 2016, slightly lower than 0.6% in Q3. The year-over-year forecast is set 1.9%, while the prior estimate was 2.2%. Following on Friday, the latest growth figures from the US will be released. Economists expect data to show a strong US economy, growing by 2.2% (annualised) in the final quarter and 2% over the year.
Author: Helal Miah, Investment Research Analyst