Tomorrow, the Office of National Statistics (ONS) will release its monthly inflation report.
Sterling languished around a three week low against the greenback on Monday with last week's equity market rout overshadowing the Bank of England's optimistic assessment of the United Kingdom economy. Within the food items, the inflation fell for vegetables to 26.97%, sugar and confectionery 2.85%, cereals and products 2.33% and fruits 6.24%.
This data will be very important because, it will give them a picture of what to expect in the coming months from the BoE.
"The Fed's job now is to prevent the economy from overheating", said Gus Faucher, chief economist at PNC Financial in Pittsburgh.
Pearce expects core inflation will reach almost 2.5 per cent in the spring and keep rising. Without apparel, the core reading would have been just 2.4% rather than 3%.
Manufacturing sector grew 8.4 per cent in December as against 0.6 per cent a year ago. Traders also see about a 22 percent chance of a fourth quarter-point increase.
Analysts polled by Reuters had predicted January's rate would ease to 5.14 per cent from 5.21 per cent in December.
The BoE also said that it assumes that the inflationary impact of sterling weakness in 2016 and 2017 on import prices is likely to be near its peak, and the producer price inflation figures should provide evidence on this.
The main event in the United Kingdom this week will be tomorrow's release of January's inflation data. Headline CPI rose by 0.5% and core CPI (minus food and energy) by 0.3%.
The RBI said its decision to keep its repo, or short term lending rate for commercial banks, unchanged is consistent with the neutral stance of the central bank aimed at achieving its median inflation target of 4 per cent. Even so, equities have recovered some ground, advancing for three trading sessions in a row through Tuesday.
Stocks went into a tailspin after January's employment report contained a hotter-than-expected gain in wages, prompting a sharp jump in interest rates. "Overall, we expect these forces to combine to temper the rate at which inflation falls back towards 2% over the next three years, with the risk that the overshoot proves more protracted". At the moment there is an expectation that the meeting in March will be a suitable time however any variation on the expected data could change that.
"But we stand by our forecasts that the MPC looks set to raise the Bank rate again by 25bps to 0.75% in May and subsequently to 1.0% in November".
Retail sales fell 0.3 percent in January from the previous month, the most since February 2017, according to the Commerce Department, compared with the median estimate of economists for a 0.2 percent increase. They were higher by about 0.5 percent ahead of the report.