Investors will finally get a better picture of how the Trump administration\u2019s trade war affected US inflation in September when delayed consumer price data is released on Friday.<\/p>\n
The ongoing government shutdown has halted official data releases, pushing back CPI data, which had been due to come out on Wednesday this week. The Federal Reserve<\/a> has nevertheless called in a limited number of employees to put out the delayed data, which is scheduled for October 24, more than a week late. <\/p>\n Delays in official data have left investors \u201cflying blind\u201d<\/a> amid concerns over lingering price pressures and the health of the world\u2019s largest economy, with many instead relying on private data and Fed surveys such as the Beige Book for insight into the US economy.<\/p>\n Economists polled by Reuters expect the data to show a rise in the annual inflation<\/a> rate to 3.1 per cent from 2.9 per cent, while the core rate is forecast to stay at 3.1 per cent.<\/p>\n The data will be considered by the Fed at its upcoming two-day meeting starting on October 28. At its last meeting, the central bank shifted its focus towards the risks of a weakening labour market over rising inflation. Its so-called dot plot shows policymakers expect inflation to reach 3 per cent at the end of the year.<\/p>\n Traders are pricing in a 0.25 percentage point cut this month and a further reduction in December.<\/p>\n Until the data arrives, many investors may hold off on placing major market bets, with the vacuum of reliable information complicating forecasts for interest rates and corporate earnings. Kate Duguid<\/p>\n Will UK inflation make it harder for the BoE to cut interest rates?<\/p>\n In a busy week ahead for UK economic data, investors will be focused on September\u2019s inflation numbers for clues about the Bank of England\u2019s next move on interest rates.<\/p>\n Economists polled by Reuters expect headline consumer price index inflation<\/a> to rise to 4 per cent, the fastest pace since the end of 2023, from 3.8 per cent the previous month.<\/p>\n The rate would match the BoE\u2019s forecast and is widely expected to mark this year\u2019s peak before inflation begins to ease again. Services inflation \u2014 a closely watched measure of domestic price pressures \u2014 is forecast to have risen from 4.7 per cent in August to 4.9 per cent in September.<\/p>\n A stronger than expected reading, especially in services, could reinforce the view that inflation is proving sticky and strengthen the case for keeping interest rates<\/a> higher for longer.<\/p>\n Traders are pricing in a roughly 50 per cent chance of a 0.25 percentage point reduction in rates by December, while a cut is fully priced in by March.<\/p>\n The rise in UK inflation in September is expected to have been driven by higher fuel, airfares and clothing costs. Some analysts also point to a delayed pass-through from the imposition of VAT on private school fees from January.<\/p>\n Food prices remain a concern, with inflation in August at 5.1 per cent \u2014 the highest since January 2024 \u2014 highlighting the risk of entrenched price expectations. However, a stabilisation of global food costs is expected to be reflected in the UK data.<\/p>\n