(Bloomberg) — The Bank of England is likely to deliver another interest-rate cut on Thursday, as tax hikes and wary consumers hamper Britain’s economy and prompt firms to slow hiring.
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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.
Following a disappointing July jobs report and the Federal Reserve’s decision to hold rates steady, investors will monitor comments from a handful of central bankers this week. Lisa Cook, Susan Collins, Mary Daly, Raphael Bostic and Alberto Musalem are slated for public events.
Meanwhile, investors will watch for any hints from the White House on who might be nominated to fill Adriana Kugler’s seat, after the Fed board member announced on Friday that she would step down.
Even before her early departure, Treasury Secretary Scott Bessent had suggested the administration might propose a replacement for Kugler who’d then be elevated into the post of Fed chair when Jerome Powell’s term ends in May.
Jobs data for July will offer the latest snapshot of the Canadian job market after a surprise jump in employment in June suggested resilience. International goods trade for June may show weakened exports to the US as tariffs start to reshape trade flows.
The US trade data will indicate the proportion of Canadian exports being sent there under the USMCA agreement, a tariff carve-out.
Asia
Key readings on trade, economic growth and inflation are scheduled across the region. The releases get under way on Tuesday, with a reading of July consumer prices for South Korea, set to show little change from a year ago.
Inflation reports are also on tap for the Philippines the same day, followed by Taiwan, Vietnam and Thailand on Wednesday. Price growth has largely been contained across the region, and central banks are looking to cut rates.
Second-quarter GDP is in the spotlight on Tuesday in Indonesia, seen broadly unchanged from the prior year, and on Thursday in the Philippines, where economists expect an uptick.
Trade is in focus following Trump’s Aug. 1 reciprocal levies announcement. Frontrunning to get ahead of these tariffs has elevated exports for many countries, so the readings for July may be among the year’s strongest before an anticipated pullback.
The insight into trade activity begins Wednesday with figures from Vietnam, which in June notched another month of double-digit growth.
Australia and China — which has faced the steepest trade restrictions on sales to the US — report export data on Thursday. Semiconductor powerhouse Taiwan closes out the week the following day.
Elsewhere, Malaysia will disclose July industrial production on Thursday, which should provide more insight into how Southeast Asian economies are handling the tariff uncertainty after PMI data showed the weakest activity outlook since the pandemic.
New Zealand reports labor market data, Singapore releases June retail sales, and Japan will report an array of financial data including foreign bond buying and household spending throughout the week.
Meanwhile, India’s central bank meets Tuesday, with Bloomberg Economics anticipating a dovish pause, holding the repo rate at 5.5% after easing 100 basis points this year.
Europe, Middle East, Africa
Switzerland, shocked at Trump’s imposition of a 39% tariff, will be in focus on Monday as markets reopen there after a national holiday. Officials are likely to redouble efforts to secure a trade deal in the coming days.
Swiss inflation data is also due on Monday, with another monthly outcome of just 0.1% anticipated. An index of Swiss purchasing managers will also be released.
In the euro zone, various industrial and trade numbers from the four biggest economies are on the schedule, pointing to the state of manufacturing in June.
Those reports could potentially lead to revisions in national and regional GDP data. On Wednesday, Eurostat revealed that the euro-area economy expanded 0.1% in the second quarter. French unemployment will be released on Friday.
The European Central Bank is on a summer break with little on its schedule. Bank of Finland Governor Olli Rehn is the exception; he’s due to speak on Thursday at a seminar featuring former BOE chief Mervyn King.
In Turkey on Monday, annual inflation data are expected to continue to show easing in July, to 34% from 35% the prior month. Monthly inflation is seen quickening, though, after a series of tax hikes and administrative price increases — which officials have characterized as “temporary.” Rate cuts may continue when the central bank meets in September.
Swedish inflation data are due on Thursday. The CPIF measure targeted by the Riksbank is anticipated by economists to surge above 3%.
Aside from the BOE, some other monetary decisions are scheduled:
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On Tuesday, Lesotho’s MPC is likely to cut its policy rate by 25 basis points to 6.75% in a bid to boost an economy devastated by Trump’s tariff determinations. Its textile industry has been at a standstill because orders from the US, its largest export market, have dried up.
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The Czech central bank is expected to keep rates unchanged at its policy-setting meeting on Thursday.
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Serbia’s central bank may do likewise, extending an almost year-long pause after inflation surged again in June.
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On Friday, Romania’s central bank is expected to keep borrowing costs unchanged as it assesses the impact of tax increases on inflation and the economy.
Latin America
Colombia’s central bank posts its quarterly inflation report and July meeting minutes on Monday and Tuesday, respectively. The report may walk back the previous quarter’s messaging about gradual policy easing given sticky inflation, surprising economic momentum, and concern over the nation’s deteriorating fiscal outlook.
After a split decision to hold the key rate at 9.25%, analysts and investors will be eager to pore over the minutes. Economists surveyed by Bloomberg see BanRep — along with Brazil’s BCB — easing into 2027.
Brazil’s policymakers on Tuesday post the minutes of their July 29-30 meeting, where they voted unanimously to hold the policy rate at 15%. Little deviation on guidance and the hawkish tone seen in the post-decision statement likely puts off any easing until 2026.
Few analysts doubt that Banxico has a quarter-point cut ready to go for its August meeting on Thursday — and that was before Trump extended Mexico’s current tariff rates for 90 days. All but two of the 37 analysts surveyed by Citi’s local unit are looking for just that — a move that would trim the key rate to 7.75%.
Three of the region’s big inflation-targeting economies post July inflation data in the coming week. Consumer price increases in Mexico may have slowed below 3.6%, while inching down to 4% in Chile and ticking up from 4.82% in Colombia.
–With assistance from Andrew Atkinson, Beril Akman, David Goodman, Erik Hertzberg, Katia Dmitrieva, Mark Evans, Monique Vanek, Robert Jameson and Vince Golle.
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