Figures in the week could corroborate the idea that rates will stay low for some time. The unemployment rate is expected to remain at 7.7 per cent, in part because net job creation is matched by an increase in the labour force, as previously inactive people join it. And although Tuesday's CPI data will seem unpleasant - showing inflation at around 2.7 per cent even before the latest round of utility bill hikes - many economists don't expect it to stay so high as to 'knock out' the Bank's commitment to low rates. They'll point to low wage growth - of under 1 per cent - and low producer price inflation, of around 1 per cent for input and output prices - as evidence of low inflation in the pipeline.
Less than 1 per cent wage growth, of course, means that real wages are still falling. However, this is not having seriously adverse effects on the macroeconomy. On Tuesday, the Royal Institute of Chartered Surveyors and the ONS are both likely to report that house price inflation is picking up - although the rate outside the south east is only around 2 per cent. And on Thursday, official figures might show a small rise in retail sales last month, leaving them 3 per cent up on a year ago. The impact of increasing employment and confidence is offsetting that of falling real wages.
Euro area data, however, will remind us that the region is still poorly. Wednesday's official data could show a small drop in industrial production in September, albeit after a good August. This would leave output almost unchanged in quarter-on-quarter terms. The next day, third-quarter figures are likely to show GDP flat or down in Italy and France, and up in Germany, consistent with the region as a whole only marginally out of recession.
In the US, Friday's official figures could show that industrial production fell in October, as a knock-on effect of the government shutdown. However, the Empire State survey the same day could show orders picking up and optimism quite high. This might be a more accurate gauge of the underlying state of the economy.
