Daily Economic Outlook: 14th October, 2015

In UK, despite current low inflation rates, signs of a tightening labour market and of a gradual acceleration in wage growth highlight the risk of a build-up in domestic inflationary pressures. In today's labour market data a return to employment growth is expected, along with a pickup in annual earnings growth to above 3%. 

The minutes of the UK's October MPC meeting showed that any concerns members have about the labour market are having little immediate impact on monetary policy, due in part to signs of a pickup in productivity growth. 

Next month's Inflation Report will need to take stock of a greater-than-expected acceleration in cost pressure, and may see greater differences emerging between members' views.   

The September retail sales report will provide an update on the strength of US consumer spending. This was one of the key drivers of GDP growth in Q2 and data so far suggest that continued to be the case in Q3. 

"The fall in gasoline prices will depress the headline growth rate, as the retail sales figures are not adjusted for inflation. However, strong car sales and sizeable gains in department store activity should underpin real spending growth", says Lloyds Bank.