LONDON (AFX) - UK data out this week will show unemployment up for the fourth month in a row, but inflationary pressures under control despite a sharp rise in the government's preferred measure, economists said.
Nevertheless, the week's data, though important, will be overshadowed by the publication of tomorrow's Inflation Report, where economists will be looking to see if the Monetary Policy Committee forecasts sub-target inflation to offset the buoyancy in consumer spending.
On the same day, economists will also have the latest inflation data to get their teeth into.
Though the government's preferred measure of inflation, RPIX, which strips out mortgage payments, will show a year-on-year increase due to base effects from sharp drops in the prices of petrol, heating oil and seasonal foods, economists remain relatively unconcerned. On a month-on-month basis, prices are set to fall. "Inflation pressures are very benign and there are few chances of the target being exceeded over the course of this year," said Investec economist Philip Shaw.
And John Butler, economist at HSBC, said he expects RPIX inflation to stay between 1.75-2.25 pct through most of 2002.
The week kicks off today with producer prices, and here again the oil price factor will be important. Economists expect month-on-month input prices to have increased in January, as crude oil prices rebounded and sterling lost ground against the dollar.
Producer output prices though are expected to be unchanged for the seventh month in a row. However, Geoffrey Dicks, economist at Royal Bank of Scotland thinks higher oil prices in January may feed through to a modest rise in petroleum product prices.
Today, the British Retail Consortium publishes its latest monthly survey into the state of the retail sector and economists will be interested to see if sales remain as strong as they have been over the last few months.
The Confederation of British Industry's distributive trades survey showed some moderation in January but official figures show consumer credit booming.
"All of which should secure a strong BRC survey in January," said Dicks.
On Wednesday, the latest unemployment figures are due and here economists anticipate a slight acceleration in the rate of job losses, following the raft of redundancies announced in the last couple of months.
However, HSBC's Butler pointed out that the labour market is weakening gradually, and that the rise in unemployment is matched by a fall in employment.
The rise in job uncertainty should also keep average earnings under control.

Economists' forecasts for UK indicators due Feb 11 to Feb 15.

AFX CONSENSUS PREVIOUS

MONDAY, FEB 11
Jan PPI Input
month-on-month 0.6 pct -0.7 pct
year-on-year -6.5 pct -6.6 pct

Jan PPI Output
month-on-month 0.0 pct 0.0 pct
year-on-year -0.6 ct -1.2 pct

Jan PPI ex-FDT
year-on-year 0.1 pct 0.1 pct

TUESDAY, FEB 12
Jan RPI
month-on-month -0.5 pct -0.1 pct
year-on-year 0.7 pct 0.9 pct

JAN RPIX
month-on-month -0.5 pct 0.2 pct
year-on-year 2.1 pct 1.9 pct

WEDNESDAY, FEB 13
Jan claimant count change +7,000 +3,200

Jan unemployment rate 3.2 pct 3.2 pct

Dec average 3 mths earnings 4.0 pct 4.2 pct

Manuf 3 mths unit wage cost 3.8 pct 3.7 pct