Euro zone inflation and the PCE inflation number for the U.S. that the US Federal Reserves looks at closely are due for release in the coming week. If either hit two per cent, it could trigger central bank action. Ciara Lee reports.
Trump's address to Congress on Tuesday may make the most headlines this week. But inflation readings of 2 percent could prove more significant. A call to action perhaps in America and an important milestone in Europe. The U.S. consumer price index has already shown prices rising at their fastest monthly pace in nearly four years in January. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "There is some inflationary pressure beginning to build in the United States. Now that is not the case in the UK and Europe where we have an increase in the CPI which seems to me is rather more a one-off price adjustment associated with base effects in the commodities market. But in the U.S. there does appear to be some genuine inflationary pressure building." If inflation fails to spur central banks, it's effect on consumers, the main drivers of growth in Europe and the United States, could prove revealing. U.S. consumer sentiment due on Tuesday will give a first assessment of Trump's turbulent first month in office. And in his speech to Congress, he's expected to include some details of his infrastructure spending and tax plans. In Europe, consumers have so far shrugged off political risk factors, including the election in the Netherlands, which votes on March 15th - and Brexit Britain. But, British inflation could start to be felt with the rate set to approach 3 percent by the end of the year due to the fall in sterling. UK consumer sentiment data for February is due out on Tuesday. Retail sales have on a whole been strong since the Brexit vote. But UK retailers are now raising prices at their fastest pace in almost six years.