Markets calm ahead of US inflation data and IMF's UK report – business live

Today’s US CPI inflation report has taken on an importance all of its own in the wake of the recently strong wages numbers, never mind the fact that the Fed doesn’t even use CPI to target inflation.

Nonetheless this renewed focus on inflation, not only in the US but more globally has raised concerns that central banks may well be behind the curve when it comes to assessing the outlook for the next few months…

Much importance is being attached to today’s US January CPI report, however it is unlikely to tell us too much more than what we already know about inflationary pressure in the US economy. Various ISM prices paid surveys are telling us that prices are rising at their highest levels since 2011, yet thus far we haven’t seen much evidence of it in the headline numbers.

Even now indications are for CPI to slip back to 1.9% from 2.1%, while retail sales for January are expected to show a rise of 0.2%, a modest slowdown from the 0.4% rise seen in December.

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