Tuesday preview: Inflation surge expected

18th Jan 2010 13:18

Data out Tuesday is expected to show inflation rose sharply in December, back above the Bank of England's 2% target.Economists predict consumer price inflation jumped to at least 2.5% last month, a nine-moth high, up from 1.9% in November and more than double September's five-year low of 1.1%. 'This expected rise in inflation is primarily the consequence of very unfavourable base effects resulting from the fact that consumer prices fell by 0.4% month-on-month in December 2008 as VAT was cut from 17.5% to 15% and oil prices fell sharply,' explained Howard Archer, chief UK economist at IHS Global Insight.A spike above 3% is forecast for the early months of this year, with 4% predicted by some, before dropping back due to 'substantial excess capacity, muted recovery, wage moderation and the need for retailers to price competitively in the face of still limited consumer spending'.Elsewhere, financial spread betting firm IG Group publishes first half numbers and it has a fan in Goldman Sachs.This set of results is well-flagged. The group said in December it expects a rise in revenue to £143m from £126.5m a year earlier, and adjusted profit before tax of around £77m versus £58.2m last time.Goldman is looking for any comment about third quarter trading, with the caveat that the Christmas period is typically a quiet one.'The strong 2Q revenue growth (+12%)?despite challenging comparatives that were boosted by the exceptional volatility in October 2008?supports our view of IGG as a business with genuine structural growth potential,' it said in a note to clients last week as it raised its price target and upgraded EBIT estimates for this year and next.INTERIMSGames Workshop Group, IG Group Holdings, ZetarIMSSAlterian, Land Securities GroupAGMSBaring Emerging Europe, Sirius Petroleum, SVM Global FundUK ECONOMIC ANNOUNCEMENTSConsumer Price InflationRetail Price Inflation