Research Team at BNP Paribas, suggests that January’s UK inflation numbers are out this morning and our economists are forecasting a 0.1pp uptick in headline to 0.3% y/y. Key Quotes “Core inflation is expected to drop back in January to 1.2% as December’s spike in airfares unwinds. Later in the week, the EU Leaders’ Summit starting on Thursday could be a pivotal event for the GBP. A successful agreement at the summit would open the way for PM Cameron to set the referendum date and start campaigning in favour of staying in, which could begin shifting the balance of opinion polls which have lately become more evenly split. The week is also busy for economic data with December employment on Wednesday and January retail sales on Friday. Although our economists do expect another cyclical low in the unemployment rate of 5% we think the GBP is more likely to benefit from a reduction of risk premium related to a possible ‘Brexit’. We remain exposed to EURGBP downside via 1m and 1y options structures.” For more information, read our latest forex news.