Global Inflation Reports to Watch Next Week: Key Data from Canada, UK, New Zealand, and Japan
12 July 2024
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Key Points:
- Canada’s Inflation Report – Tuesday
- UK’s Inflation Report – Wednesday
- New Zealand’s Inflation Report – Thursday
- Japan’s Inflation Report – Thursday
Next week, all eyes will be on crucial inflation reports from Canada, the UK, New Zealand, and Japan, which will provide insights into the economic health and monetary policy directions of these countries.
Canada’s Inflation Report – Tuesday
Canada’s inflation rate unexpectedly rose to 2.9% in May 2024, up from 2.7% in April, defying forecasts of a slowdown to 2.6%. Although still within the Bank of Canada’s (BoC) target range of 1% to 3%, this increase could pose challenges for the BoC’s planned rate cuts, highlighting persistent price pressures for consumers.
UK’s Inflation Report – Wednesday
In the UK, the annual inflation rate fell to 2% in May 2024, the lowest since July 2021, down from 2.3% in April. The Bank of England’s Monetary Policy Committee expects inflation to rise to 3% later this year before falling to 2% next year. Robert Gardner, chief economist at Nationwide Building Society, sees a high probability of rate cuts in August, though disappointing inflation data could delay this to November. Some policymakers are cautious about the sustainability of the drop from over 11% in 2022 to 2% in May 2024 and want more data before making decisions.
New Zealand’s Inflation Report – Thursday
New Zealand’s quarterly inflation increased to 0.6% in the first quarter of 2024, up from 0.5% in the previous quarter. ANZ Research predicts easing inflation for the second quarter, with a 0.4% quarter-on-quarter rise in the CPI. The Reserve Bank of New Zealand (RBNZ) will closely monitor next week’s CPI data, as a significant drop in inflation could boost the likelihood of an Official Cash Rate (OCR) cut in August.
Japan’s Inflation Report – Thursday
Japan’s annual inflation rate accelerated to 2.8% in May 2024 from 2.5% in April, the highest since February. The Bank of Japan (BoJ) expects inflation to hover around its 2% target in the coming years. However, recent weak household spending figures suggest a fragile consumer activity, casting doubt on the BoJ’s optimistic outlook. Markets are divided on the timing of the BoJ’s next rate hike, with some expecting action as soon as July and October, according to ING forecasts.
