Further evidence that the recovery in the United Kingdome is gaining traction is expected this week, as the economic calendar launched today with fresh updates on November retail sales following the release of strong jobs report in the previous session. Retail sales will probably show a rise of 0.3 percent in November from 0.6 percent decline in October, according to the reading excluding auto fuel, where the annual reading will inch up to 2.4 percent from 2.3 percent a year earlier. On the other hand, the reading including auto fuel is estimated to gain 0.3 percent from a drop of 0.7 percent, and increase to 2.2 percent on the annual basis from a prior 1.8 percent. The report is predicted to have an impact of the British pound if it came better or worse than expectations. Yesterday`s unemployment report showed UK unemployment rate dropped to its lowest level since April 2009 of 7.4 percent, taking a step towards the 7% threshold identified by the Bank of England as guidance to raising interest rate. Meanwhile, UK inflation fell in November to give more help the Central bank to adopt its forward guidance which is linked to an unemployment threshold of 7%. Data released on Tuesday showed that Consumer Price Index (CPI) for the year ended November dropped to 2.1%, the lowest in four years. On the monthly basis, the reading slipped to 0.1% from the prior reading of 0.4%. Looking ahead, Friday is set to bring a fresh raft of data, including mortgage approvals, public sector borrowing and GDP figures. All of this will give markets a boost ahead of Christmas holiday amid hopes that a rebound in UK economy will continue in the last quarter of 2013.
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