Today’s April MPC meeting minutes were taken as relatively hawkish. The minutes suggested that previous GBP strength had fed through to prices faster than expected. This, combined with the fading impact of lower energy prices, could lead to a faster pickup in inflation in the future. The economists suggest the full impact of any changes here will not be clear until we see the May Inflation Report (May 13). For March UK retail sales out this afternoon, economists expect the strong gains that we saw in Jan/Feb to continue (cons: ex-auto: 0.5%m/m, incl. auto :0.4%). They also highlight, however, that as usual, changing shopping habits have made it difficult to interpret broad UK activity from retail sales.
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