London Week Ahead: UK’s Christmas gift of boost to GDP and jobs

FURTHER evidence that the recovery is gaining traction is expected this week with inflation figures and the release of the employment rate, which may top 30m for the first time ever.

While the inflation rate, measured by the consumer prices index (CPI), is forecast to remain at 2.2 per cent – the lowest since September 2012 – the number of jobs and the pay rate appear to be increasing.

“We have pencilled in a small rise in the headline rate of pay growth from 0.8 per cent to 0.9 per cent,” said Jonathan Loynes, of Capital Economics.

“With core price pressures easing and the government taking action to reduce the cost of living, headline CPI inflation looks likely to fall further next year. This should contribute to the squeeze on real pay easing.”

Meanwhile Blerina Uruci, of Barclays, predicted good news in the jobs market.

“We expect the October labour market data to show a gradual improvement in the claimant count and earnings,” she said. “The October ILO unemployment rate is expected to be unchanged at 7.6 per cent, but the claimant count measure (a more timely indicator) is projected to have fallen 35,000 in November.”

The economics calendar is launched today with the Rightmove House Price Index, giving further good news for London house owners, whose homes have increased 10.6 per cent in value over the last year.

Tomorrow’s inflation figures come as part of a raft of official November figures, including the producer price index and retail price index.

Wednesday’s job statistics, which relate to October, include average earnings and the unemployment rate and Thursday’s headline news will be retail sales figures.

Friday is set to bring a fresh raft of data, including mortgage approvals, public sector borrowing and GDP figures. Howard Archer, of IHS Global Insight, said: “UK GDP growth looks largely on course for another strong gain in the fourth quarter, and will likely come in close to the 0.8 per cent quarter-on-quarter growth rate achieved in the third quarter. As a result, we expect overall GDP growth to come in at 1.4 per cent in 2013.”

While the economics calendar remains busy, the corporate calendar has slowed almost to a standstill in the lead up to Christmas, with news expected this week from GCP Infrastructure Investments, Cohort, Dixons, Darty and Goodwin.