Honeymoon is over for Carney as inflation bites

BANK of England governor Mark Carney is expected to face his first major economic hurdle this week with inflation likely to have reached a 14-month high.

Analysts predict Consumer Prices Index inflation of just under three per cent for June, the highest since April last year.

“Figures out tomorrow are expected to show that consumer price inflation rose to a 14-month high of 2.9 per cent in June from 2.7 per cent in May and a seven-month low of 2.4 per cent in April,” said Howard Archer, of IHS Global Insight. “Consumer price inflation is expected to have moved up in June primarily due to higher food and petrol prices.”

The poor figures mean the honeymoon is over for Carney, who was welcomed to the job at the start of the month with the best manufacturing figures since April 2011. The City will gain further insight into his tactics when minutes of the latest Monetary Policy Committee meeting are published on Wednesday, showing whether he voted for more stimulus.

Tomorrow’s raft of economic data includes the producer price index and retail price index for June as well as Office for National Statistics house price figures for May.

Wednesday’s releases include average earnings and the unemployment rate for May as well as claimant count figures for June.

Barclays’ Blerina Uruci said: “We expect the claimant count measure to have fallen by 7,000 in June and to post its eighth consecutive decline.”

Retail sales figures for June will be released on Thursday, followed by Friday’s data for June’s public finances and public sector net borrowing.

In the corporate calendar, Ilika, Access Intelligence, Amino Technologies, Frenkel Topping Group, Sthree and Thorntons are due to report today.

Ideagen, Schroder Real Estate Investment Trust, Dragon Oil and Michael Page International will give figures tomorrow.

Heath (Samuel) & Sons, Abbott Laboratories, Coalfield Resources, Land Securities Group, Electrocomponents and Intermediate Capital Group will update the market on Wednesday.

Sports Direct, Breedon Aggregates, Norsk Hydro, Kingfisher, Mothercare, Hilton Food Group and London Stock Exchange will give figures on Thursday.

Finally Record and Vodafone will report on Friday.