UNITED KINGDOM (REUTERS) - The European Central Bank surprised a few last week by doing very little.
This week it is the turn of the Bank of England.
Any moves from rate setters there would be a real shock.
A struggling economy and Brexit fears are offsetting any concerns over target inflation.
“We’ve just seen some construction data for July which was very disappointing and that’s perhaps endemic of business investment decisions being postponed and we’re seeing the consumer remaining under pressure as the legacy of the falling value of sterling plays out in terms of higher import prices,” Head of Strategy, CIBC, Jeremy Stretch said.
The UK economy initially withstood last year’s decision to quit the EU.
However, it has slowed sharply in 2017 and is expected to grow by just 0.3 per cent - half the rate of the euro zone.
“UK activities will remain very lacklustre over the course of the next few quarters and possibly even through the next couple of years as we continue to grow at a pace which is far below the trend rate of growth,” added Stretch.
The US has already started tightening but weak economic data suggests it may soften its stance.
“The debt ceiling issue which had been overhanging the market has been put on the back burner at least for another three months or so. But the question is does that allow or does it provide room for some discussion about fiscal reform moving rather further up the agenda,” Stretch said.
Hurricane damage is also a distraction in the US and so is North Korea.
Trump’s reaction to both will be closely watched.