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THE FINANCIAL WEEK AHEAD WITH AMP

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The markets will have plenty of UK and US data to absorb this week. In the UK key inflation data is due in the form...
The markets will have plenty of UK and US data to absorb this week. In the UK key inflation data is due in the form of October producer input and output prices (Monday) and October retail prices (Wednesday).

The city is forecasting upward movements in all of these indices, although it should be borne in mind that any movements will be from historically low levels. (September's retail price inflation stood at its lowest level for 27 years).

On a wider scale, the highlight of this coming week will be Tuesday's Federal Open Markets committee meeting. This is the committee, chaired by Alan Greenspan, that decides on interest rate policy in the US. The key issue is likely to be not whether the Federal Reserve raises interest rates, (currently at 4.75%), but by how much they raise them.

US economic news will include October retail sales, industrial production and capacity utilisation on Tuesday, all of which are forecast to be robust. The markets will look to Wednesday's consumer prices for any indication of higher commodity prices and wage pressure feeding through into final prices.

Many forecasters do not expect US inflation to rise sharply as a result of domestically-generated price pressures, although it is unlikely that consumer price inflation will remain as subdued over the next year as it has done in the past year.
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