25 Mar 2014
Expectations for weaker German IFO, UK inflation expected to continue declines
FXStreet (London) - Expectations this morning are for a decline in German IFO numbers. This comes following disappointing German PMI and ZEW figures. The index from the ZEW Center for European Economic Research slid to 46.6 from 55.7 in February. Yesterday’s release from Markit showed that its preliminary German manufacturing purchasing managers’ index fell to a seasonally-adjusted 53.8 in March from a final reading of 54.8 in February.
Weakening German conditions
Consensus expectations are for a decline in the IFO business environment index, from 111.3 to 110.0, with expectations declining from 108.3 to 107.6. However, we may see further downside, based on aforementioned weaker German data.
UK inflation three-and-a-half year low expected
In the UK, expectations are for CPI to fall to an October 2009 low, at 1.7 percent from 1.9 percent. While we may see some strength within core CPI, weaker food and energy prices should help push year-on-year inflation to the 1.7 percent consensus expectation, and in line with the Bank of England’s Quarterly Inflation Report forecasts for the first quarter. A decline in inflation would would be a further positive move for the BoE as it shifts its focus away from the headline unemployment rate in favour of a more inflation-based approach.
Weakening German conditions
Consensus expectations are for a decline in the IFO business environment index, from 111.3 to 110.0, with expectations declining from 108.3 to 107.6. However, we may see further downside, based on aforementioned weaker German data.
UK inflation three-and-a-half year low expected
In the UK, expectations are for CPI to fall to an October 2009 low, at 1.7 percent from 1.9 percent. While we may see some strength within core CPI, weaker food and energy prices should help push year-on-year inflation to the 1.7 percent consensus expectation, and in line with the Bank of England’s Quarterly Inflation Report forecasts for the first quarter. A decline in inflation would would be a further positive move for the BoE as it shifts its focus away from the headline unemployment rate in favour of a more inflation-based approach.