Economic week ahead

UK inflation data takes centre stage on Tuesday with the rate forecast to rebound from June’s unexpectedly low figure of 2.6pc.

The Office for National Statistics said that lower petrol and diesel prices were responsible for the first fall in inflation since October 2016.

With the debate over whether to raise interest rates to curb the effects of inflation splitting the Bank of England six to two at the latest MPC meeting, any rise beyond the expected 2.7pc in the data for July will embolden monetary policy hawks and will see the pound spike in the currency markets.

Little change is expected in the unemployment figures for June due on Wednesday.

May’s data showed that the jobless rate came in at 4.5pc, its lowest figure since 1975. The 42-year low in unemployment is expected to continue. But wage growth figures due the same day will also be keenly watched with average earnings growth expected to slow to 1.7pc, squeezing UK household spending further and putting more pressure on retailers.