Market News

The Monetary Policy Committee is widely expected to reduce its benchmark rate by 25 basis points, to 4%, sticking to its once-a-quarter pace of cutting.

In contrast to the caution of the US Federal Reserve, which kept borrowing costs unchanged again on Wednesday, the BOE is looking through the fastest inflation in 17 months and focusing instead on growth worries after back-to-back contractions in gross domestic product and mounting job losses over the spring.

Employers have cut demand for workers after being hit by measures in the Labour government’s first budget, which included a £26 billion ($34.5 billion) increase in payroll taxes and a sharp increase in the minimum wage.

What Bloomberg Economics Says:

“We think the central bank will be cautious about signaling more rate cuts are in the offing – inflation has surprised to the upside and price expectations are elevated.”

—Dan Hanson, chief UK economist. For full analysis, click here

BOE Governor Andrew Bailey has continued to guide markets toward gradual rate cuts and maintains that the recent jump in price pressures will be temporary. Officials will unveil a quarterly update to forecasts after inflation turned out hotter than they’d predicted back in May.

Investors will also be looking for any hints on how quickly the UK central bank plans to run down its balance sheet of bonds ahead of its next decision on quantitative tightening in September.

Speculation has mounted that the BOE will limit the amount of active gilt sales after signs of strain in long-dated UK bond yields.

Elsewhere, trade data from multiple nations and a potential rate cut in Mexico are among the week’s highlights. Meanwhile, after President Donald Trump’s latest tariff barrage, some countries will attempt to renegotiate US levies before they kick in on Aug. 7.

Click here for what happened in the past week, and below is our wrap of what’s coming up in the global economy.

US and Canada

The US economic calendar lightens up after key reports showed bigger cracks forming in the job market after a slowdown in economic growth during the first half of 2025. On Tuesday, government data will likely show the trade deficit in goods and service narrowed in June.

Preliminary figures indicated the value of goods imports by the US declined for a third straight month, marking a reversal from the first quarter when companies aggressively stockpiled foreign-made merchandise ahead of expected higher tariffs.

Also on Tuesday, the Institute for Supply Management’s July survey of service providers will provide clues on how well industries that represent the biggest slice of the economy are holding up. The group’s manufacturing survey showed the sharpest contraction in nine months against a backdrop of higher import duties and softer demand.