UK producer prices increased in July at the fastest pace since records began in 1986, 10.2 percent from a year earlier, adding to pressure on the Bank of England to wait before cutting interest rates even if the economy slows further. Nonetheless, manufacturers were helped by an actual fall in UK input prices, down on the month by 0.6% in July (against market expectations of a +1% gain) pulling the annual inflation rate down, but at 30.1% it’s still extremely elevated. Looking deeper into the figures suggests that firms may be reaching their limits in terms of the price increases they are able to pass on.

Meanwhile, the trade balance in June deteriorated to £4.4bn, from £4.1bn in May, against market expectations of a small improvement. This was largely due to a rise in the value of oil imports. Excluding oil and erratic items, the volume of exports was 1.5 per cent higher in June than in May, outpacing the volume of imports at 0.5 per cent higher.

This week will be crucial in determining whether the US dollar has finally broken free from its six-year downward trend. Against the euro, the dollar has surged more than 10 cents in the past month, taking it to a six-month high of $1.49 (from $1.60) and a 21-month high of $1.91 against sterling. This does not necessarily mean that the US economy is in good shape, just that relative to expectations the economy is improving while there is now concern for the slowdown in eurozone growth in the coming months.

Data out today includes UK RICS house price balance at 00.01BST, UK CPI out at 0930 BST and US Trade Balance out at 13.30 BST

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