UK inflation probably remains near a ten-year high and retail sales are likely to have gained for a third consecutive month, two reports due this week are expected to show.

The market predictions continued to support the pound on the foreign exchange markets, with sterling trading up at €66.62 and $1.9555 early on Monday.

If proved correct, the results will add further pressure on the Bank of England to continue to raise rates when they meet in March.

In the US, trading has been muted ahead of a series of fourth-quarter reports and economic indicators due over the coming weeks.

Later today, the US Treasury will release budget data for January, while on Tuesday the Commerce Department will release statistics on the trade balance.

Wednesday will see the release of January retail sales figures and December business inventories, as well as testimony from Federal Reserve chair Ben Bernanke on the US economic outlook.

Commerce department data on import and export prices during January and unemployment statistics from the labour department are due on Thursday.

Rounding out the week, a key report on the number of housing starts and building permits issued will be issued on Friday alongside the Producer Price Index for January.