Bank of England Governor Mark Carney said policy makers can look beyond the inflation slump and won’t wait too long before acting to return price growth to target. He stated that the Bank Of England's job is to bring inflation back to the 2 percent inflation target within a reasonable horizon and should"be within the next two years.”
The MPC has diverged on the possible timing of policy tightening from its emergency setting as plunging oil prices drive inflation to a record low and wage data show building work-force cost pressures. Deputy Governor Ben Broadbent said the next move in interest rates is likely to be an increase, comments shared by MPC member Kristin Forbes at an earlier event on Tuesday.
Food and energy prices now account for three-quarters of the movement lower away from target, compared with two-thirds when the BOE published its Inflation Report in mid-February.
Eurozone finance ministers approved reform proposals submitted by Greece in order to gain an extension of its bailout. The Eurogroup said it had agreed to proceed with national procedures. The measures proposed by Greece include combating tax evasion and tackling the smuggling of fuel and tobacco.
However, International Monetary Fund head Christine Lagarde expressed some reservations about the proposals saying "In some areas like combating tax evasion and corruption I am encouraged by what appears to be a stronger resolve on the part of the new authorities in Athens," she wrote in a letter to the Eurogroup. "In quite a few areas, however, including perhaps the most important ones, the letter is not conveying clear assurances that the government intends to undertake the reforms envisaged."
Newly elected Greek Prime Minister Alexis Tsipras is trying to balance satisfying the demands of creditors with meeting his pre-election pledges.
The Federal Reserve is preparing to consider interest rate hikes "on a meeting-by-meeting basis," Fed Chair Janet Yellen told a congressional committee on Tuesday in a subtle change of emphasis in how the U.S. central bank has spoken about its plans for its first rate hike since 2006. Yellen described how the Fed's rate-setting policy committee will likely proceed in coming months - an effort to increase the Fed's flexibility and mute any potential market reaction ahead of the "liftoff" date.
Yellen said she felt U.S. labour markets and other key economic indicators "have been increasing at a solid rate." However, she said she still feels the job market is not fully repaired, and that the U.S. outlook remains somewhat clouded by a weaker-than-hoped-for global economy, stalled wage growth, and falling inflation.
The lack of inflation has made some Fed policy makers hesitant to commit to raising rates until they are more certain the United States is not headed down the same path as Europe or Japan, mature industrial economies that are struggling to maintain growth.
GBP- 10:00 : Bank Of England Govenor Mark Carney makes a speech
USD- 15:00 :US Fed Chair Janet Yellen testifies
USD- 15:00 :US New home sales (Jan) expected to fall from 481K to 477K
EUR- 16:30 : ECB President Mario Draghi makes a speech
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