Yesterday afternoon the Bank of England held interest rates at 0.25% but signalled another cut is still on the cards later this year despite a Brexit bounce in the economy.
Minutes of the latest Monetary Policy Committee (MPC) meeting showed all nine members voted to keep the base rate on hold after it was halved last month from 0.5% to cushion the blow of the vote to quit the EU. The minutes revealed a majority of the MPC are still open to another rate cut, expected to around 0.1%, before the end of the year. Economists believe the cut will come on November 3rd, when the Bank will next meet and have its next set of quarterly economic forecasts to hand.
Official figures out separately on Thursday showed retail sales falling by a far less-than-predicted 0.2% month-on-month in August, suggesting consumer confidence has held up in the wake of the Brexit vote. Sales of more expensive household goods such as electrical appliances and hardware fell year-on-year for the first time since May 2014.
In the afternoon session the US retail sales figure fell more than expected in August amid weak purchases of automobiles and a range of other goods. Pointing to cooling domestic demand that further diminishes expectations of a Federal Reserve interest rate increase next week.
Other data on Thursday showed the labour market continuing to tighten with layoffs remaining very low last week, and underlying producer inflation creeping up in August.
13:30 – USD: Consumer Pricing Index (CPI) is forecast to increase to 0.1%
13:30 – USD: Core CPI is forecast to increase to 0.2%
15:00 – USD: Preliminary MoM Consumer Sentiment is expect to improve to 91