OUTLOOK UK economic news to show easing cost pressures among manufacturers

The coming week's economic news in the UK is unlikely to have much of an impact on the market's prediction of a Bank of England rate increase in November. However, sterling markets will be particularly interested to see how much lower oil prices are easing cost pressures among manufacturers and to what extent rising rate expectations and higher utility bills are impacting upon consumption. Monday, October 9 -The sustained fall in oil prices to below 60 usd a barrel at one stage should further reduce raw material costs for the UK's manufacturers during September. Analysts polled by AFX News expect input prices, on a seasonally-adjusted basis, to have fallen 0.8 pct between August and September, following the previous 1.2 pct reduction, and drag the year-on-year increase down to 6.4 pct from 7.5 pct. "The drop in oil prices should drag input prices down again," said John Butler, economist at HSBC. "Manufacturers may attempt to rebuild margins but underlying output price inflation should ease further," he added. Prices at the factory gate are expected to have been subdued with the monthly rise forecast to be only 0.1 pct for a year-on-year 2.1 pct gain. In August output prices were unchanged over the month for a 2.6 pct annual rise. -Government figures for August are set to show house price inflation rising a little further with the year-on-year rate up at 6.8 pct from the previous month's 6.0 pct. Royal Bank of Scotland's chief UK economist Geoff Dicks noted that other measures of house price inflation generally drifted higher during the month, and where they fell it was generally from a higher level. "There is probably some further upside for the index in August and base effects should be helpful," he added. Tuesday, October 10 -Exports are set to have been supported during September, particularly from the euro zone, the UK's biggest single trading partner. Nevertheless, the UK's global trade in goods balance is not expected to have improved much, if at all, from August's 6.3 bln stg shortfall. However, analysts expect some improvement in the non-EU position to -4.0 bln stg from August's record -4.3 bln. They noted that the data are very difficult to assess at the moment given wide-scale fraud related revisions. -The monthly survey from the British Retail Consortium is poised to show high street activity continuing to grow at a fairly steady rate in September. Analysts reckon the year-on-year increase in like-for-like sales, which strips out new space and stores, will be unchanged at 2.5 pct. In particular, they said they will be interested to see how the benefits from lower petrol prices were impacted by rising interest rate expectations and another round of utility price rises. Thursday, October 12 -The third quarter economic survey from the British Chambers of Commerce is expected to paint a fairly solid picture within both the manufacturing and services sector, with the confidence balances holding up from the previous three months.