UK data unlikely to ease loans rate concerns

Data released this week is not expected to deter from the fact that further rate increases in the U.K probably still remain. The Bank of England’s growing concerns with the fact that inflation is rising faster than expected will probably be noted with the statement accompanying the minutes on Wednesday.

UK growth for the fourth quarter is also due on Wednesday, with the forecast for an increase of 0.7 per cent which would leave the year-on-year rate unchanged at 2.9 per cent. Service sector activity at a 10 year high, probably means that economic growth accelerated in the last three months of 2006.

This could underline market concerns that interest rates are to continue to rise, possibly to 5.75 per cent.

The dollar may strengthen this week as speculation grows that U.S. home sales stabilized last month and orders for durable goods jumped. The currency may extend from gains last week, where it climbed to the highest in almost four years against the yen.

Speculation that reports will show that the U.S. new home sales and consumer sentiment was stronger than forecast could cut speculation that the Federal Reserve will cut rates in coming months.

Crude oil prices are expected to grow this week on speculation that cold weather in the north east region of the U.S. will boost consumption. The northeast region of the U.S. is the biggest consumer of heating oil in the U.S

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